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Contracting out placement services in Germany : is assignment to private providers effective for needy job-seekers?

Author

Listed:
  • Bernhard, Sarah

    () (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])

  • Wolff, Joachim

    () (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])

Abstract

"Contracting out placement services aims at enhancing the effectiveness of placements of unemployed job-seekers through market mechanisms. This paper analyses the effectiveness of the temporary assignment of needy job-seekers to private placement services by comparing their outcomes with respect to employment, unemployment and benefit receipt with those of a suitable control group. Using recently available administrative data we apply propensity score matching to construct the control group. We regard a period after a policy reform in 2005 that introduced a new means-tested benefit, the unemployment benefit II, and emphasized the activation of needy unemployed people. Hard-to-place job-seekers usually need more effort to be placed into a job. Therefore it is an interesting question whether groups of people with different a priori employment probabilities benefit to a different extent from an assignment to a private placement service. To answer this question we analyse several subgroups separated by sex, age, migration background, occupational education and time since the last job. Our results suggest that in some cases the assignment to private providers is relatively more effective for groups of job-seekers who are rather hard to place. Despite positive employment effects for some subgroups, however our results imply that the assignment to private providers is generally ineffective and in some subgroups counterproductive regarding the goal of avoiding unemployment and benefit receipt." (Author's abstract, IAB-Doku) ((en))

Suggested Citation

  • Bernhard, Sarah & Wolff, Joachim, 2008. "Contracting out placement services in Germany : is assignment to private providers effective for needy job-seekers?," IAB Discussion Paper 200805, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  • Handle: RePEc:iab:iabdpa:200805
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    References listed on IDEAS

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    1. Sascha O. Becker & Marco Caliendo, 2007. "Sensitivity analysis for average treatment effects," Stata Journal, StataCorp LP, vol. 7(1), pages 71-83, February.
    2. Marco Caliendo & Sabine Kopeinig, 2008. "Some Practical Guidance For The Implementation Of Propensity Score Matching," Journal of Economic Surveys, Wiley Blackwell, vol. 22(1), pages 31-72, February.
    3. Winterhager, Henrik & Heinze, Anja & Spermann, Alexander, 2006. "Deregulating job placement in Europe: A microeconometric evaluation of an innovative voucher scheme in Germany," Labour Economics, Elsevier, vol. 13(4), pages 505-517, August.
    4. repec:iab:iabzaf:v:38:i:1:p:7-29 is not listed on IDEAS
    5. A. D. Roy, 1951. "Some Thoughts On The Distribution Of Earnings," Oxford Economic Papers, Oxford University Press, vol. 3(2), pages 135-146.
    6. Robert G. Fay, 1997. "Making the Public Employment Service More Effective through the Introduction of Market Signals," OECD Labour Market and Social Policy Occasional Papers 25, OECD Publishing.
    7. Ludo Struyven, 2004. "Design Choices in Market Competition for Employment Services for the Long-Term Unemployed," OECD Social, Employment and Migration Working Papers 21, OECD Publishing.
    8. Sascha O. Becker & Andrea Ichino, 2002. "Estimation of average treatment effects based on propensity scores," Stata Journal, StataCorp LP, vol. 2(4), pages 358-377, November.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Danula K. Gamage & Pedro S. Martins, 2018. "Evaluating Public-Private Partnerships in Employment Services: The Case of the UK Work Programme," Working Papers 87, Queen Mary, University of London, School of Business and Management, Centre for Globalisation Research.
    2. Bernhard, Sarah & Gartner, Hermann & Stephan, Gesine, 2008. "Wage subsidies for needy job-seekers and their effect on individual labour market outcomes after the German reforms," IAB Discussion Paper 200821, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    3. Heyer, Gerd & Koch, Susanne & Stephan, Gesine & Wolff, Joachim, 2011. "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," IAB Discussion Paper 201117, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    4. Wolff, Joachim & Nivorozhkin, Anton, 2008. "Start me up: The effectiveness of a self-employment programme for needy unemployed people in Germany," IAB Discussion Paper 200820, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    5. Krister Sund, 2015. "Did the Introduction of Private Contractors Improve Turnover to Employment in the Swedish Labor Market?," Journal of Labor Research, Springer, vol. 36(4), pages 389-408, December.
    6. Gesine Stephan, 2016. "Public or private job placement services—Are private ones more effective?," IZA World of Labor, Institute for the Study of Labor (IZA), pages 285-285, August.
    7. Stephan Gesine, 2008. "The Effects of Active Labor Market Programs in Germany: An Investigation Using Different Definitions of Non-Treatment," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 228(5-6), pages 586-611, October.
    8. Stephan, Gesine & Zickert, Kathi, 2008. "Participation of unemployment benefit recipients in active labor market programs : before and after the German labor market reforms," IAB Discussion Paper 200815, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    9. Marco Caliendo & Ricarda Schmidl, 2016. "Youth unemployment and active labor market policies in Europe," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-30, December.
    10. Krug, Gerhard & Stephan, Gesine, 2013. "Is the Contracting-Out of Intensive Placement Services More Effective than Provision by the PES? Evidence from a Randomized Field Experiment," IZA Discussion Papers 7403, Institute for the Study of Labor (IZA).
    11. Bennmarker, Helge & Grönqvist, Erik & Öckert, Björn, 2013. "Effects of contracting out employment services: Evidence from a randomized experiment," Journal of Public Economics, Elsevier, vol. 98(C), pages 68-84.
    12. repec:eee:labeco:v:45:y:2017:i:c:p:169-187 is not listed on IDEAS
    13. Caliendo, Marco & Mahlstedt, Robert & Mitnik, Oscar A., 2017. "Unobservable, but unimportant? The relevance of usually unobserved variables for the evaluation of labor market policies," Labour Economics, Elsevier, vol. 46(C), pages 14-25.
    14. Pierre Koning & C.J. Heinrich, 2009. "Cream-skimming, parking and other intended and unintended effects of performance-based contracting in social welfare services," CPB Discussion Paper 134, CPB Netherlands Bureau for Economic Policy Analysis.

    More about this item

    Keywords

    private Arbeitsvermittlung; Vermittlungserfolg; Vermittlungsgutschein; Arbeitsvermittlung; Privatisierung; Hartz-Reform - Erfolgskontrolle; Arbeitsuchende; Zielgruppe; schwervermittelbare Arbeitslose; Beschäftigungseffekte; Arbeitslose; berufliche Reintegration; Integrierte Erwerbsbiografien; IAB-Leistungsempfängerhistorik;

    JEL classification:

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

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