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Before and After the Hartz Reforms: The Performance of Active Labour Market Policy in Germany

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Author Info
Jochen Kluve ()
Lena Jacobi ()
Abstract

Having faced high unemployment rates for more than a decade, the German government implemented a comprehensive set of labour market reforms during the period 2003-2005. This paper describes the economic and institutional context of the German labour market before and after these so-called Hartz reforms.Focussing on active policy measures,we delineate the rationale for reform and its main principles.As results of programme evaluation studies post-reform have become available just now, we give a first assessment of the effectiveness of key elements of German ALMP before and after the Hartz reforms. The evidence indicates that the re-organisation of public employment services was mainly successful, with the exception of the outsourcing of services. Re-designing training programmes seems to have improved their effectiveness, while job creation schemes continue to be detrimental for participants’ employment prospects. Wage subsidies and start-up subsidies show significantly positive effects.On balance, therefore, the reform seems to be moving the German labour market in the right direction.

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Paper provided by Rheinisch-Westfälisches Institut für Wirtschaftsforschung in its series RWI Discussion Papers with number 0041.

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Length: 33 pages
Date of creation: Apr 2006
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Handle: RePEc:rwi:dpaper:0041

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Related research
Keywords: Active labour market policy; labour market reform; programme evaluation; Hartz laws;

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Find related papers by JEL classification:
J0 - Labor and Demographic Economics - - General
J68 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Public Policy
J88 - Labor and Demographic Economics - - Labor Standards - - - Public Policy

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Michael Lechner & Ruth Miquel & Conny Wunsch, 2005. "The Curse and Blessing of Training the Unemployed in a Changing Economy: The Case of East Germany after Unification," University of St. Gallen Department of Economics working paper series 2005 2005-15, Department of Economics, University of St. Gallen. [Downloadable!]
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  2. Michael Fertig & Jochen Kluve, 2004. "A Conceptual Framework for the Evaluation of Comprehensive Labor Market Policy Reforms in Germany," RWI Discussion Papers 0013, Rheinisch-Westfälisches Institut für Wirtschaftsforschung. [Downloadable!]
  3. Fitzenberger, Bernd & Speckesser, Stefan, 2005. "Employment Effects of the Provision of Specific Professional Skills and Techniques in Germany," ZEW Discussion Papers 05-77, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
  4. Fertig, Michael & Kluve, Jochen, 2004. "A Conceptual Framework for the Evaluation of Comprehensive Labor Market Policy Reforms in Germany," IZA Discussion Papers 1099, Institute for the Study of Labor (IZA). [Downloadable!]
  5. Lechner, Michael & Miquel, Ruth & Wunsch, Conny, 2004. "Long-Run Effects of Public Sector Sponsored Training in West Germany," IZA Discussion Papers 1443, Institute for the Study of Labor (IZA). [Downloadable!]
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  6. Caliendo, Marco & Hujer, Reinhard & Thomsen, Stephan L., 2005. "The Employment Effects of Job Creation Schemes in Germany: A Microeconometric Evaluation," IZA Discussion Papers 1512, Institute for the Study of Labor (IZA). [Downloadable!]
  7. Eva Reinowski & Birgit Schultz & Jürgen Wimers, 2004. "Evaluation of Further Training Programmes with an Optimal Matching Algorithm," IWH Discussion Papers 188, Halle Institute for Economic Research. [Downloadable!]
  8. Lechner, Michael, 1999. "Earnings and Employment Effects of Continuous Off-the-Job Training in East Germany after Unification," Journal of Business & Economic Statistics, American Statistical Association, vol. 17(1), pages 74-90, January.
  9. Fitzenberger, Bernd & Speckesser, Stefan, 2005. "Employment effects of the provision of specific professional skills and techniques in Germany," IAB Discussion Paper 200521, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]. [Downloadable!]
  10. Eichler, Martin & Lechner, Michael, . "An Evatuation of Public Employment Programms in the East German State of Sachsen-Anhalt," IVS discussion paper series 560, Institut für Volkswirtschaft und Statistik (IVS), University of Mannheim.
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  11. Bernd Fitzenberger & Stefan Speckesser, 2005. "Employment Effects of the Provision of Specific Professional Skills and Techniques in Germany," IZA Discussion Papers 1868, Institute for the Study of Labor (IZA). [Downloadable!]
  12. Marco Caliendo & Viktor Steiner, 2005. "Aktive Arbeitsmarktpolitik in Deutschland: Bestandsaufnahme und Bewertung der mikroökonomischen Evaluationsergebnisse," Discussion Papers of DIW Berlin 515, DIW Berlin, German Institute for Economic Research. [Downloadable!]
  13. Pfeiffer, Friedhelm & Reize, Frank, 2000. "Business start-ups by the unemployed -- an econometric analysis based on firm data," Labour Economics, Elsevier, vol. 7(5), pages 629-663, September. [Downloadable!] (restricted)
  14. Michael Lechner, 1999. "An Evaluation of Public-Sector-Sponsored Continuous Vocational Training Programs in East Germany," IZA Discussion Papers 93, Institute for the Study of Labor (IZA). [Downloadable!]
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  15. Hujer, Reinhard & Thomsen, Stephan L. & Zeiss, Christopher, 2004. "The Effects of Vocational Training Programmes on the Duration of Unemployment in Eastern Germany," IZA Discussion Papers 1117, Institute for the Study of Labor (IZA). [Downloadable!]
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  16. Annette Bergemann & Bernd Fitzenberger & Stefan Speckesser, 2005. "Evaluating the Dynamic Employment Effects of Training Programs in East Germany Using Conditional Difference-in-Differences," IZA Discussion Papers 1848, Institute for the Study of Labor (IZA). [Downloadable!]
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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Dominique Demougin & Carsten Helm, 2008. "Incentive Contracts and Efficient Unemployment Benefits," Darmstadt Discussion Papers in Economics 191, Institut für Volkswirtschaftslehre (Department of Economics), Technische Universität Darmstadt (Darmstadt University of Technology). [Downloadable!]
    Other versions:
  2. Eichhorst, Werner & Zimmermann, Klaus F, 2007. "And Then There Were Four... How Many (and Which) Measures of Active Labour Market Policy Do We Still Need?," CEPR Discussion Papers 6246, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  3. Biewen, Martin & Fitzenberger, Bernd & Osikominu, Aderonke & Waller, Marie, 2007. "Which Program for Whom? Evidence on the Comparative Effectiveness of Public Sponsored Training Programs in Germany," ZEW Discussion Papers 07-042, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
    Other versions:
  4. Manuel Frondel & Rainer Kambeck & Christoph M. Schmidt, 2006. "Hard Coal Subsidies: A Never-Ending Story?," RWI Discussion Papers 0053, Rheinisch-Westfälisches Institut für Wirtschaftsforschung. [Downloadable!]
    Other versions:
  5. Arntz, Melanie & Wilke, Ralf A., 2006. "Unemployment duration in Germany : individual and regional determinants of local job finding, migration and subsidized employment," ZEW Discussion Papers 06-92, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
  6. Werner Eichhorst & Lutz C. Kaiser, 2006. "The German Labor Market: Still Adjusting Badly?," IZA Discussion Papers 2215, Institute for the Study of Labor (IZA). [Downloadable!]
  7. Bernhard Ebbinghaus & Werner Eichhorst, 2006. "Employment Regulation and Labor Market Policy in Germany, 1991-2005," IZA Discussion Papers 2505, Institute for the Study of Labor (IZA). [Downloadable!]
  8. Werner Eichhorst & Klaus F. Zimmermann, 2007. "And Then There Were Four ...: How Many (and Which) Measures of Active Labor Market Policy Do We Still Need? ; Finding a Balance after the Evaluation of the Hartz Reforms in Germany," Discussion Papers of DIW Berlin 685, DIW Berlin, German Institute for Economic Research. [Downloadable!]
  9. Werner Eichhorst & Maria Grienberger-Zingerle & Regina Konle-Seidl, 2006. "Activation Policies in Germany: From Status Protection to Basic Income Support," IZA Discussion Papers 2514, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  10. Werner Eichhorst, 2007. "The Gradual Transformation of Continental European Labor Markets: France and Germany Compared," IZA Discussion Papers 2675, Institute for the Study of Labor (IZA). [Downloadable!]
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