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Active labor market policy in Germany--Is there a successful policy strategy?

Listed author(s):
  • Fertig, Michael
  • Schmidt, Christoph M.
  • Schneider, Hilmar

Each year Germany and many other developed economies spend tens of billions of Euros on active measures of employment promotion with the explicit aim of contributing to the reduction of unemployment. Yet, high unemployment has universally been a persistent problem throughout the last two decades, raising the question as to the actual effect of the measures of employment promotion. This paper contributes to the received literature by investigating whether a specific strategy of active labor market policy measures can contribute to a significant reduction of unemployment on the (semi-) aggregate level of the local labor offices in Germany. To this end, we analyze ALMP in Germany in a spatially augmented regression framework. Our results suggest that a policy strategy focusing on monetary incentive schemes rather than on public employment programs is more successful.

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Article provided by Elsevier in its journal Regional Science and Urban Economics.

Volume (Year): 36 (2006)
Issue (Month): 3 (May)
Pages: 399-430

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Handle: RePEc:eee:regeco:v:36:y:2006:i:3:p:399-430
Contact details of provider: Web page: http://www.elsevier.com/locate/regec

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  1. Fitzenberger, Bernd & Speckesser, Stefan, 2000. "Zur wissenschaftlichen Evaluation der aktiven Arbeitsmarktpolitik in Deutschland: Ein Überblick," ZEW Discussion Papers 00-06, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  2. 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.
  3. Fertig, Michael & Schmidt, Christoph M., 2000. "Discretionary Measures of Active Labor Market Policy: The German Employment Promotion Reform in Perspective," IZA Discussion Papers 182, Institute for the Study of Labor (IZA).
  4. Layard, R. & Nickell, S., 1991. "Unemployment in the OECD Countries," Economics Series Working Papers 99130, University of Oxford, Department of Economics.
  5. Calmfors, Lars & Skedinger, Per, 1995. "Does Active Labour-Market Policy Increase Employment? Theoretical Considerations and Some Empirical Evidence from Sweden," Oxford Review of Economic Policy, Oxford University Press, vol. 11(1), pages 91-109, Spring.
  6. 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.
  7. Worswick,G. D. N., 1991. "Unemployment: A Problem of Policy," Cambridge Books, Cambridge University Press, number 9780521400343, Diciembre.
  8. Daniel Friedlander & David H. Greenberg & Philip K. Robins, 1997. "Evaluating Government Training Programs for the Economically Disadvantaged," Journal of Economic Literature, American Economic Association, vol. 35(4), pages 1809-1855, December.
  9. Albert Ma, Ching-to & Weiss, Andrew M., 1993. "A signaling theory of unemployment," European Economic Review, Elsevier, vol. 37(1), pages 135-157, January.
  10. Fitzenberger, Bernd & Prey, Hedwig, 2000. "Evaluating Public Sector Sponsored Training in East Germany," Oxford Economic Papers, Oxford University Press, vol. 52(3), pages 497-520, July.
  11. Kornelius Kraft, 1998. "An evaluation of active and passive labour market policy," Applied Economics, Taylor & Francis Journals, vol. 30(6), pages 783-793.
  12. repec:hhs:iuiwop:429 is not listed on IDEAS
  13. Nickell, S., 1991. "Wages, Unemployment and Population Change," Economics Series Working Papers 99122, University of Oxford, Department of Economics.
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