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Should Welfare Administration be Centralized or Decentralized? Evidence from a Policy Experiment

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  • Bernhard Boockmann
  • Stephan L. Thomsen
  • Thomas Walter
  • Christian Göbel
  • Martin Huber

Abstract

type="main" xml:id="geer12021-abs-0001"> The 2005 reform of the German welfare system introduced two competing organizational models for welfare administration. In most districts, a centralized organization was established where local welfare agencies are bound to central directives. At the same time, 69 districts were allowed to opt for a decentralized organization. We evaluate the relative success of both types in terms of integrating welfare recipients into employment. Compared to centralized organization, decentralized organization has a negative effect on employment chances of males. For women, no significant effect is found. These findings are robust to the inclusion of aspects of internal organization common to both types of agencies.

Suggested Citation

  • Bernhard Boockmann & Stephan L. Thomsen & Thomas Walter & Christian Göbel & Martin Huber, 2015. "Should Welfare Administration be Centralized or Decentralized? Evidence from a Policy Experiment," German Economic Review, Verein für Socialpolitik, vol. 16(1), pages 13-42, February.
  • Handle: RePEc:bla:germec:v:16:y:2015:i:1:p:13-42
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    File URL: http://hdl.handle.net/10.1111/geer.2015.16.issue-1
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    References listed on IDEAS

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    1. Eichhorst, Werner & Grienberger-Zingerle, Maria & Konle-Seidl, Regina, 2006. "Activation Policies in Germany: From Status Protection to Basic Income Support," IZA Discussion Papers 2514, Institute of Labor Economics (IZA).
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    Citations

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    Cited by:

    1. Lukas Mergele, 2016. "Are there gains from decentralizing public employment offices?," Working Papers 2015020, Berlin Doctoral Program in Economics and Management Science (BDPEMS).
    2. PD Christian Holzner & Sonja Munz, 2011. "Should Local Public Employment Services be Merged with the Local Social Benefit Administrations?," CESifo Working Paper Series 3472, CESifo Group Munich.
    3. Regina T. Riphahn & Christoph Wunder, 2016. "State dependence in welfare receipt: transitions before and after a reform," Empirical Economics, Springer, vol. 50(4), pages 1303-1329, June.
    4. Oliver Falck & Siegfried Schönherr, 2016. "Eine Agenda für Wirtschaftsreformen in Kroatien: ein umfassendes wirtschaftspolitisches Reformpaket im Auftrag der kroatischen Staatsstiftung," ifo Forschungsberichte, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 70, September.
    5. Michael Weber, 2016. "The short-run and long-run effects of decentralizing public employment services," ifo Working Paper Series 209, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    6. Wolfgang Nagl & Michael Weber, 2016. "Stuck in a trap? Long-term unemployment under two-tier unemployment compensation schemes," ifo Working Paper Series 231, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    7. Lukas Mergele & Michael Weber, 2017. "Public employment services under decentralization: evidence from a natural experiment," Working Papers 2017002, Berlin Doctoral Program in Economics and Management Science (BDPEMS).

    More about this item

    JEL classification:

    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models

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