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What Did All the Money Do? On the General Ineffectiveness of Recent West German Labour Market Programmes

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Author Info
Conny Wunsch ()
Michael Lechner ()

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Abstract

We provide new evidence on the effectiveness of West German labour market programmes by evaluating training and employment programmes that have been conducted 2000 - 2002 after the first large reform of German labour market policy in 1998. We employ exceptionally rich administrative data that allow us to use microeconometric matching methods and to estimate interesting effects for different types of programmes and participants at a rather disaggregated level. We find that, on average, all programmes fail to improve their participants' chances of finding regular, unsubsidised employment. Rather, participants accumulate 2 - 13 more months of unemployment than nonparticipants over the 2.5 years following programme start, which, in addition to direct programme costs, induces net costs in terms of benefit payments and wage subsidies amounting to, on average, 1500- 7000 EUR per participant. However, we show that there is some scope for improvements in mean employment rates as well as potential for considerable cost savings by a reallocation of participants to the different programmes.

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File URL: http://www.vwa.unisg.ch/RePEc/usg/dp2007/DP-19-Wu.pdf
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Paper provided by Department of Economics, University of St. Gallen in its series University of St. Gallen Department of Economics working paper series 2007 with number 2007-19.

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Length: 42 pages
Date of creation: May 2007
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Handle: RePEc:usg:dp2007:2007-19

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Related research
Keywords: Matching estimation; causal effects; programme evaluation; panel data;

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

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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. 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!]
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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. Martin Huber & Michael Lechner & Conny Wunsch & Thomas Walter, 2009. "Do German Welfare-to-Work Programmes Reduce Welfare and Increase Work?," University of St. Gallen Department of Economics working paper series 2009 2009-03, Department of Economics, University of St. Gallen. [Downloadable!]
    Other versions:
  2. Paolo, NATICHIONI, 2008. "Short and long term evaluations of Public Employment Services in Italy," Discussion Papers (ECON - Département des Sciences Economiques) 2008030, Université catholique de Louvain, Département des Sciences Economiques. [Downloadable!]
  3. Michael Lechner & Blaise Melly, 2007. "Earnings Effects of Training Programs," University of St. Gallen Department of Economics working paper series 2007 2007-28, Department of Economics, University of St. Gallen. [Downloadable!]
    Other versions:
  4. Osikominu, Aderonke & Orlyanskaya, Olga & Fitzenberger, Bernd & Waller, Marie, 2008. "Déj? Vu? Short-Term Training in Germany 1980-1992 and 2000-2003," ZEW Discussion Papers 08-038, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
    Other versions:
  5. Bernhard, Sarah & Hohmeyer, Katrin & Jozwiak, Eva & Koch, Susanne & Kruppe, Thomas & Stephan, Gesine & Wolff, Joachim, 2008. "Aktive Arbeitsmarktpolitik in Deutschland und ihre Wirkungen," IAB-Forschungsbericht 200802, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]. [Downloadable!]
  6. Stephan Thomsen, 2009. "Job Search Assistance Programs in Europe: Evaluation Methods and Recent Empirical Findings," FEMM Working Papers 09018, Otto-von-Guericke University Magdeburg, Faculty of Economics and Management. [Downloadable!]
  7. Stephan, Gesine, 2008. "The effects of active labor market programs in Germany : an investigation using different definitions of non-treatment," IAB Discussion Paper 200812, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]. [Downloadable!]
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  8. Stefanie Behncke & Markus Frölich & Michael Lechner, 2007. "Public Employment Services and Employers: How Important are Networks with Firms?," IZA Discussion Papers 3005, Institute for the Study of Labor (IZA). [Downloadable!]
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  9. Martin Huber, 2009. "Treatment evaluation in the presence of sample selection," University of St. Gallen Department of Economics working paper series 2009 2009-07, Department of Economics, University of St. Gallen. [Downloadable!]
  10. Büttner, Thomas, 2007. "Ankündigungseffekt oder Maßnahmewirkung? : eine Evaluation von Trainingsmaßnahmen zur Überprüfung der Verfügbarkeit," IAB Discussion Paper 200725, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]. [Downloadable!]
  11. Ulf Rinne & Marc Schneider & Arne Uhlendorff, 2007. "Too Bad to Benefit?: Effect Heterogeneity of Public Training Programs," Discussion Papers of DIW Berlin 749, DIW Berlin, German Institute for Economic Research. [Downloadable!]
    Other versions:
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