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Short- and Long-term Ex-Post Effects of Unemployment Insurance Sanctions: Evidence from West Germany

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  • Hofmann Barbara

    () (Institut für Arbeitsmarkt- und Berufsforschung (IAB) der Bundesagentur für Arbeit (BA), Regensburger Straße 104, 90478 Nürnberg, Germany)

Abstract

Unemployment insurance (UI) benefit sanctions in form of benefit reductions are intended to set an incentive to comply with job search requirements and to decrease moral hazard behaviour. However, sanctions might also affect the subsequent employment history. Empirical research on long-term effects is scarce. Using administrative data, we investigate short- and long-term effects of sanctions on the reemployment probability of individuals in West Germany who entered UI benefit receipt between April 2000 and March 2001. As outcomes we consider regular employment, other employment, and having dropped out of the registered labour market. By applying a matching approach that takes the timing of treatment into account, we identify the ex post effect of UI sanctions. According to our results, sanctions are effective in increasing the probability of regular employment for young sanctioned UI benefit recipients. Older women on average respond to a sanction by taking up jobs of lower quality. For both women and men, we find an increased number of months out of the official work force after a sanction.

Suggested Citation

  • Hofmann Barbara, 2012. "Short- and Long-term Ex-Post Effects of Unemployment Insurance Sanctions: Evidence from West Germany," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 232(1), pages 31-60, February.
    • Handle: RePEc:jns:jbstat:v:232:y:2012:i:1:p:31-60
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    References listed on IDEAS

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    Cited by:

    1. Schmieder, Johannes F & Trenkle, Simon, 2020. "Disincentive effects of unemployment benefits and the role of caseworkers," Journal of Public Economics, Elsevier, vol. 182(C).
    2. Wolff, Joachim & Moczall, Andreas, 2012. "Übergänge von Alg-II-Beziehern in die erste Sanktion : Frauen werden nur selten sanktioniert," IAB-Forschungsbericht 201211, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    3. Barbara Hofmann, 2014. "Sick of being “Activated?”," Empirical Economics, Springer, vol. 47(3), pages 1103-1127, November.
    4. Hohenleitner, Ingrid & Hillmann, Katja, 2019. "Impact of welfare sanctions on employment and benefit receipt: Considering top-up benefits and indirect sanctions," HWWI Research Papers 189, Hamburg Institute of International Economics (HWWI).
    5. Krebs, Tom & Scheffel, Martin, 2016. "Structural Reform in Germany," IZA Discussion Papers 9787, Institute of Labor Economics (IZA).
    6. Krebs, Tom & Scheffel, Martin, 2016. "Quantifizierung der gesamtwirtschaftlichen Effekte ausgewählter Reformvorschläge der Studie "Reforms, Investment and Growth: An Agenda for France, Germany and Europe"," Working Papers 16-04, University of Mannheim, Department of Economics.
    7. Rainer Eppel & Helmut Mahringer, 2019. "Getting a lot out of a little bit of work? The effects of marginal employment during unemployment," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 46(2), pages 381-408, May.

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