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Wage Subsidies for Needy Job-Seekers and Their Effect on Individual Labour Market Outcomes after the German Reforms

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Listed:
  • Bernhard, Sarah

    () (Institute for Employment Research (IAB), Nuremberg)

  • Gartner, Hermann

    () (Institute for Employment Research (IAB), Nuremberg)

  • Stephan, Gesine

    () (Institute for Employment Research (IAB), Nuremberg)

Abstract

Our paper estimates the average effect of wage subsidies – paid to employers for a limited period of time – on the labour market prospects of needy job-seekers without access to insurance-paid 'unemployment benefit I'. The results show that wage subsidies had large and significant favourable effects: 20 months after taking up a subsidised job, the share of persons in regular employment is nearly 40 percentage points higher across participants. On the whole, groups with particular placement difficulties benefit comparatively more from subsidisation.

Suggested Citation

  • 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," IZA Discussion Papers 3772, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp3772
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    References listed on IDEAS

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    Cited by:

    1. Lechner, Michael & Scioch, Patrycja & Wunsch, Conny, 2013. "Do Firms Benefit from Active Labour Market Policies?," Working papers 2013/11, Faculty of Business and Economics - University of Basel.
    2. Bernhard Boockmann & Tobias Brändle, 2015. "Integrating Older Employees into the Labour Market – Evidence from a German Labour Market Programme," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 13(3), pages 59-64, October.
    3. Alessio Brown & Johannes Koettl, 2015. "Active labor market programs - employment gain or fiscal drain?," IZA Journal of Labor Economics, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-36, December.
    4. Takahashi, Ryo & Todo, Yasuyuki, 2015. "Coffee certification and forest quality: A case in Ethiopia," 2015 Conference, August 9-14, 2015, Milan, Italy 211939, International Association of Agricultural Economists.
    5. Zabel, Cordula, 2011. "Lone mothers' participation in labor market programs for means-tested benefit recipients in Germany," IAB Discussion Paper 201114, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    6. Marco Caliendo & Jens Hogenacker, 2012. "The German labor market after the Great Recession: successful reforms and future challenges," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 1(1), pages 1-24, December.
    7. Rainer Eppel & Helmut Mahringer, 2013. "Do Wage Subsidies Work in Boosting Economic Inclusion? Evidence on Effect Heterogeneity in Austria," WIFO Working Papers 456, WIFO.
    8. 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].
    9. Takahashi, Ryo & Todo, Yasuyuki, 2017. "Coffee Certification and Forest Quality: Evidence from a Wild Coffee Forest in Ethiopia," World Development, Elsevier, vol. 92(C), pages 158-166.
    10. repec:ces:ifodic:v:13:y:2015:i:3:p:19172607 is not listed on IDEAS
    11. Benjamin Schünemann & Michael Lechner & Conny Wunsch, 2015. "Do Long-Term Unemployed Workers Benefit from Targeted Wage Subsidies?," German Economic Review, Verein für Socialpolitik, vol. 16(1), pages 43-64, February.
    12. Alessandra Pasquini & Marco Centra & Guido Pellegrini, 2018. "Long-Term Unemployed hirings: Should targeted or untargeted policies be preferred?," Papers 1802.03343, arXiv.org, revised May 2018.
    13. Alessio J. G. Brown, 2015. "Can hiring subsidies benefit the unemployed?," IZA World of Labor, Institute for the Study of Labor (IZA), pages 163-163, June.
    14. Caliendo, Marco, 2009. "Income Support Systems, Labor Market Policies and Labor Supply: The German Experience," IZA Discussion Papers 4665, Institute for the Study of Labor (IZA).
    15. Walter, Thomas & Butschek, Sebastian, 2013. "What Active Labour Market Programmes Work for Immigrants in Europe?," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79745, Verein für Socialpolitik / German Economic Association.
    16. Sebastian Butschek & Thomas Walter, 2014. "What active labour market programmes work for immigrants in Europe? A meta-analysis of the evaluation literature," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-18, December.
    17. Rainer Eppel & Helmut Mahringer, 2012. "Do wage subsidies work in boosting economic inclusion? Evidence on e," EcoMod2012 4065, EcoMod.
    18. Rita Almeida & Larry Orr & David Robalino, 2014. "Wage subsidies in developing countries as a tool to build human capital: design and implementation issues," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-24, December.
    19. Kopf, Eva & Zabel, Cordula, 2014. "Active labour market programmes for women with a partner : challenge or replication of traditional gender roles," IAB Discussion Paper 201406, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    20. Gerd Heyer & Susanne Koch & Gesine Stephan & Joachim Wolff, 2012. "Evaluation der aktiven Arbeitsmarktpolitik: Ein Sachstandsbericht für die Instrumentenreform 2011," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 45(1), pages 41-62, March.
    21. vom Berge, Philipp & Klingert, Isabell & Becker, Sebastian & Lenhart, Julia & Trenkle, Simon & Umkehrer, Matthias, 2016. "Mindestlohnbegleitforschung - Überprüfung der Ausnahmeregelung für Langzeitarbeitslose : Forschungsauftrag des Bundesministeriums für Arbeit und Soziales (BMAS)," IAB-Forschungsbericht 201608, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].

    More about this item

    Keywords

    wage subsidies; unemployment benefits II for needy job-seekers; evaluation of active labour market programmes; propensity score matching;

    JEL classification:

    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings

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