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Give them a break! Did activation of young welfare recipients overshoot in Germany? (A regression discontinuity analysis)

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  • Wolff, Joachim
  • Nivorozhkin, Anton
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    Abstract

    In Germany, due to special rules 15- to 24-year-old welfare recipients, registered with Public Employment Office, are highly targeted by mandatory activation policies. This paper investigates the effects of the special rules in terms of enhancing the (re-)employment probability, increasing earnings and reducing benefit dependency of targeted people in East and West Germany in the short- and the long-run. Using registry dataset of the inflow into unemployment and welfare over the period October 2005 to January 2006 the paper exploits the age related eligibility rule to identify a suitable counterfactual using a regression discontinuity design. Our estimates imply zero or negative effects of targeting for selected population subgroups. A possible explanation to our finding is that an excessive targeting of young welfare recipients by active labour market programmes may lead to a low quality matches between programmes and participants. --

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    Bibliographic Info

    Paper provided by Verein für Socialpolitik / German Economic Association in its series Annual Conference 2012 (Goettingen): New Approaches and Challenges for the Labor Market of the 21st Century with number 62046.

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    Date of creation: 2012
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    Handle: RePEc:zbw:vfsc12:62046

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    Web page: http://www.socialpolitik.org/
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    Cited by:
    1. Eichhorst, Werner & Boeri, Tito & Braga, Michela & De Coen, An & Galasso, Vincenzo & Gerard, Maarten & Kendzia, Michael J. & Mayrhuber, Christine & Pedersen, Jakob Louis & Schmidl, Ricarda & Steiber, , 2013. "Report No. 53: Combining the Entry of Young People in the Labour Market with the Retention of Older Workers," IZA Research Reports 53, Institute for the Study of Labor (IZA).

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