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Active labour market policy in East Germany

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  • Michael Lechner
  • Conny Wunsch

Abstract

We investigate the effects of the most important East German active labour market programmes on the labour market outcomes of their participants. The analysis is based on a large and informative individual database derived from administrative data sources. Using matching methods, we find that over a horizon of 2.5 years after the start of the programmes, they fail to increase the employment chances of their participants in the regular labour market. However, the programmes may have other effects for their participants that may be considered important in the especially difficult situation experienced in the East German labour market.

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  • Michael Lechner & Conny Wunsch, 2009. "Active labour market policy in East Germany," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 17(4), pages 661-702, October.
  • Handle: RePEc:bla:etrans:v:17:y:2009:i:4:p:661-702
    DOI: 10.1111/j.1468-0351.2009.00362.x
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    1. Michael Lechner, 2002. "Program Heterogeneity And Propensity Score Matching: An Application To The Evaluation Of Active Labor Market Policies," The Review of Economics and Statistics, MIT Press, vol. 84(2), pages 205-220, May.
    2. Marco Caliendo & Reinhard Hujer & Stephan Thomsen, 2008. "Identifying effect heterogeneity to improve the efficiency of job creation schemes in Germany," Applied Economics, Taylor & Francis Journals, vol. 40(9), pages 1101-1122.
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    6. Michael Gerfin & Michael Lechner, 2002. "A Microeconometric Evaluation of the Active Labour Market Policy in Switzerland," Economic Journal, Royal Economic Society, vol. 112(482), pages 854-893, October.
    7. Caliendo, Marco & Hujer, Reinhard & Thomsen, Stephan L., 2004. "Evaluation der Eingliederungseffekte von Arbeitsbeschaffungsmaßnahmen in reguläre Beschäftigung für Teilnehmer in Deutschland," ZEW Discussion Papers 04-46, ZEW - Leibniz Centre for European Economic Research.
    8. Lechner, Michael & Smith, Jeffrey, 2007. "What is the value added by caseworkers?," Labour Economics, Elsevier, vol. 14(2), pages 135-151, April.
    9. Conny Wunsch & Michael Lechner, 2008. "What Did All the Money Do? On the General Ineffectiveness of Recent West German Labour Market Programmes," Kyklos, Wiley Blackwell, vol. 61(1), pages 134-174, February.
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    13. Eichler, Martin & Lechner, Michael, 2002. "An evaluation of public employment programmes in the East German State of Sachsen-Anhalt," Labour Economics, Elsevier, vol. 9(2), pages 143-186, April.
    14. Barbara Sianesi, 2004. "An Evaluation of the Swedish System of Active Labor Market Programs in the 1990s," The Review of Economics and Statistics, MIT Press, vol. 86(1), pages 133-155, February.
    15. Michael Lechner, 2002. "Some practical issues in the evaluation of heterogeneous labour market programmes by matching methods," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 165(1), pages 59-82, February.
    16. Fitzenberger, Bernd & Volter, Robert, 2007. "Long-run effects of training programs for the unemployed in East Germany," Labour Economics, Elsevier, vol. 14(4), pages 730-755, August.
    17. 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.
    18. Lechner, Michael, 2009. "Sequential Causal Models for the Evaluation of Labor Market Programs," Journal of Business & Economic Statistics, American Statistical Association, vol. 27, pages 71-83.
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    Cited by:

    1. Michael Gerfin & Michael Lechner, 2002. "A Microeconometric Evaluation of the Active Labour Market Policy in Switzerland," Economic Journal, Royal Economic Society, vol. 112(482), pages 854-893, October.
    2. Thomas Kruppe & Julia Lang, 2018. "Labour market effects of retraining for the unemployed: the role of occupations," Applied Economics, Taylor & Francis Journals, vol. 50(14), pages 1578-1600, March.
    3. Michael Lechner & Stephan Wiehler, 2011. "Kids or courses? Gender differences in the effects of active labor market policies," Journal of Population Economics, Springer;European Society for Population Economics, vol. 24(3), pages 783-812, July.
    4. Isabelle Benoteau & Véronique Rémy, 2015. "Quels liens les bénéficiaires de contrats aidés entretiennent-ils avec le marché du travail ? Une description à partir du Panel 2008," Économie et Statistique, Programme National Persée, vol. 477(1), pages 53-83.
    5. Kamila Fialová & OndÅej Schneider, 2009. "Labor Market Institutions and Their Effect on Labor Market Performance in the New EU Member Countries," Eastern European Economics, Taylor & Francis Journals, vol. 47(3), pages 57-83, May.
    6. Bergemann, Annette & Pohlan, Laura & Uhlendorff, Arne, 2017. "The impact of participation in job creation schemes in turbulent times," Labour Economics, Elsevier, vol. 47(C), pages 182-201.
    7. Moczall, Andreas, 2013. "Subsidies for substitutes? : New evidence on deadweight loss and substitution effects of a wage subsidy for hard-to-place job-seekers," IAB Discussion Paper 201305, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    8. Jaenichen, Ursula, 2002. "Lohnkostenzuschüsse und individuelle Arbeitslosigkeit : Analysen auf der Grundlage kombinierter Erhebungs- und Prozessdaten unter Anwendung von Propensity Score Matching (Wage subsidies and individual," Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 35(3), pages 327-351.
    9. Martin Biewen & Bernd Fitzenberger & Aderonke Osikominu & Marie Paul, 2014. "The Effectiveness of Public-Sponsored Training Revisited: The Importance of Data and Methodological Choices," Journal of Labor Economics, University of Chicago Press, vol. 32(4), pages 837-897.
    10. Lechner, Michael & Wunsch, Conny, 2013. "Sensitivity of matching-based program evaluations to the availability of control variables," Labour Economics, Elsevier, vol. 21(C), pages 111-121.
    11. Heyer, Gerd & Koch, Susanne & Stephan, Gesine & Wolff, Joachim, 2012. "Evaluation der aktiven Arbeitsmarktpolitik: Ein Sachstandsbericht für die Instrumentenreform 2011 (Evaluation of active labor market programs : a summary of recent results for the German program refor," Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 45(1), pages 41-62.
    12. Brändle, Tobias & Fervers, Lukas, 2018. "Give it Another Try: What are the Effects of a Job Creation Scheme Especially Designed for Hard-to-Place Workers?," VfS Annual Conference 2018 (Freiburg, Breisgau): Digital Economy 181536, Verein für Socialpolitik / German Economic Association.
    13. Robert Orlowski & Regina T. Riphahn, 2009. "Im Osten nichts Neues – Lohnstrukturen knapp 20 Jahre nach dem Mauerfall," ifo Dresden berichtet, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 16(03), pages 24-27, June.
    14. Carlo Altavilla & Floro Ernesto Caroleo, 2013. "Asymmetric Effects of National-based Active Labour Market Policies," Regional Studies, Taylor & Francis Journals, vol. 47(9), pages 1482-1506, October.
    15. Reize, Frank, 2000. "Leaving unemployment for self-employment: a discrete duration analysis of determinants and stability of self-employment among former unemployed," ZEW Discussion Papers 00-26, ZEW - Leibniz Centre for European Economic Research.
    16. Tobias Brändle & Lukas Fervers, 2017. "Give it Another Try: What are the Effects of a Public Employment Scheme Especially Designed for Hard-to-Place Workers?," IAW Discussion Papers 129, Institut für Angewandte Wirtschaftsforschung (IAW).
    17. Holger Bonin & Ulf Rinne, 2014. "‘Beautiful Serbia’ - objective and subjective outcomes of active labour market policy in a transition economy," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 22(1), pages 43-67, January.
    18. Martin Huber & Michael Lechner & Andreas Steinmayr, 2015. "Radius matching on the propensity score with bias adjustment: tuning parameters and finite sample behaviour," Empirical Economics, Springer, vol. 49(1), pages 1-31, August.
    19. Juan Carlos Martinez Oliva, 2009. "Riunificazione intertedesca e politiche per la convergenza," Mo.Fi.R. Working Papers 14, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.

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