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The employment effects of job-creation schemes in Germany: A microeconometric evaluation

In: Modelling and Evaluating Treatment Effects in Econometrics

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  • Marco Caliendo
  • Reinhard Hujer
  • Stephan L. Thomsen

Abstract

In this chapter, we evaluate the employment effects of job-creation schemes (JCS) on the participating individuals in Germany. JCS are a major element of active labour market policy in Germany and are targeted at long-term unemployed and other hard-to-place individuals. Access to very informative administrative data of the Federal Employment Agency justifies the application of a matching estimator and allows us to account for individual (group-specific) and regional effect heterogeneity. We extend previous studies for Germany in four directions. First, we are able to evaluate the effects on regular (unsubsidised) employment. Second, we observe the outcomes of participants and non-participants for nearly three years after the programme starts and can therefore analyse medium-term effects. Third, we test the sensitivity of the results with respect to various decisions that have to be made during implementation of the matching estimator. Finally, we check if a possible occurrence of a specific form of ‘unobserved heterogeneity’ distorts our interpretation. The overall results are rather discouraging, since the employment effects are negative or insignificant for most of the analysed groups. One exception are long-term unemployed individuals who benefit from participation at the end of our observation period. Hence, one policy implication is to address the programmes to this problem group more closely.

Suggested Citation

  • Marco Caliendo & Reinhard Hujer & Stephan L. Thomsen, 2008. "The employment effects of job-creation schemes in Germany: A microeconometric evaluation," Advances in Econometrics, in: Modelling and Evaluating Treatment Effects in Econometrics, pages 381-428, Emerald Group Publishing Limited.
  • Handle: RePEc:eme:aecozz:s0731-9053(07)00013-8
    DOI: 10.1016/S0731-9053(07)00013-8
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    More about this item

    JEL classification:

    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy
    • H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate
    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General

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