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Do German Welfare-to-Work Programmes Reduce Welfare and Increase Work?

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Author Info

  • Martin Huber

    ()

  • Michael Lechner

    ()

  • Conny Wunsch

    ()

  • Thomas Walter

    ()

Abstract

Many Western economies have reformed their welfare systems with the aim of activating welfare recipients by increasing welfare-to-work programmes and job search enforcement. We evaluate the three most important German welfare-to-work programmes implemented after a major reform in January 2005 ("Hartz IV"). Our analysis is based on a unique combination of large scale survey and administrative data that is unusually rich with respect to individual, household, agency level, and regional information. We use this richness to allow for a selection-on-observables approach when doing the econometric evaluation. We find that short-term training programmes on average increase their participants' employment perspectives and that all programmes induce further programme participation. We also show that there is considerable effect heterogeneity across different subgroups of participants that could be exploited to improve the allocation of welfare recipients to the specific programmes and thus increase overall programme effectiveness

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Bibliographic Info

Paper provided by Department of Economics, University of St. Gallen in its series University of St. Gallen Department of Economics working paper series 2009 with number 2009-03.

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Length: 39 pages
Date of creation: Mar 2009
Date of revision:
Handle: RePEc:usg:dp2009:2009-03

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Keywords: Welfare-to-work policies; propensity score matching; programme evaluation; panel data; targeting;

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References

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  1. Conny Wunsch & Michael Lechner, 2007. "What Did All the Money Do? On the General Ineffectiveness of Recent West German Labour Market Programmes," University of St. Gallen Department of Economics working paper series 2007 2007-19, Department of Economics, University of St. Gallen.
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  3. Jochen Kluve & Lena Jacobi, 2006. "Before and After the Hartz Reforms: The Performance of Active Labour Market Policy in Germany," RWI Discussion Papers 0041, Rheinisch-Westfälisches Institut für Wirtschaftsforschung.
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  12. Wolff, Joachim & Jozwiak, Eva, 2007. "Does short-term training activate means-tested unemployment benefit recipients in Germany?," IAB Discussion Paper 200729, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
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  27. Hohmeyer, Katrin & Wolff, Joachim, 2007. "A fistful of Euros: Does One-Euro-Job participation lead means-tested benefit recipients into regular jobs and out of unemployment benefit II receipt?," IAB Discussion Paper 200732, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
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Citations

Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Welfare-to-work programs work, sort of
    by Economic Logician in Economic Logic on 2009-04-27 14:00:00
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Cited by:
  1. Hohmeyer, Katrin & Wolff, Joachim, 2010. "Direct job creation in Germany revisited: Is it effective for welfare recipients and does it matter whether participants receive a wage?," IAB Discussion Paper 201021, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  2. Wolff, Joachim & Hohmeyer, Katrin, 2011. "Direct job creation revisited: Is it effective for welfare recipients and does it matter whether participants receive a wage?," Annual Conference 2011 (Frankfurt, Main): The Order of the World Economy - Lessons from the Crisis 48722, Verein für Socialpolitik / German Economic Association.
  3. Thomsen, Stephan L. & Walter, Thomas, 2010. "Temporary extra jobs for immigrants: Merging lane to employment or dead-end road in welfare?," ZEW Discussion Papers 10-027, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  4. Bergemann, Annette & Caliendo, Marco & van den Berg, Gerard J. & Zimmermann, Klaus F., 2011. "The threat effect of participation in active labor market programs on job search behavior of migrants in Germany," Working Paper Series 2011:4, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  5. Christian Hohendanner, 2011. "Ein-Euro-Jobs und regulaere Beschaeftigung," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 231(2), pages 210-246, April.
  6. John P. Haisken-DeNew & Matthias Vorell, 2009. "Killing them with Kindness: Negative Distributional Externalities of Increasing UI Benefits," Ruhr Economic Papers 0121, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  7. Bernhard Boockmann & Stephan Thomsen & Thomas Walter, 2011. "Aktivierung der erwerbsfähigen Hilfebedürftigen mit arbeitsmarktpolitischen Maßnahmen – Wer wird gefördert?," AStA Wirtschafts- und Sozialstatistisches Archiv, Springer, vol. 4(4), pages 269-292, January.
  8. Aldashev, Alisher & Thomsen, Stephan L. & Walter, Thomas, 2010. "Short-term training programs for immigrants: do effects differ from natives and why?," ZEW Discussion Papers 10-021, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.

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