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Before and After the Hartz Reforms: The Performance of Active Labour Market Policy in Germany

Author

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  • Jacobi, Lena
  • Kluve, Jochen

Abstract

Having faced high unemployment rates for more than a decade, the German government implemented a comprehensive set of labour market reforms during the period 2003-2005. This paper describes the economic and institutional context of the German labour market before and after these so-called Hartz reforms.Focussing on active policy measures,we delineate the rationale for reform and its main principles.As results of programme evaluation studies post-reform have become available just now, we give a first assessment of the effectiveness of key elements of German ALMP before and after the Hartz reforms. The evidence indicates that the re-organisation of public employment services was mainly successful, with the exception of the outsourcing of services. Re-designing training programmes seems to have improved their effectiveness, while job creation schemes continue to be detrimental for participants? employment prospects. Wage subsidies and start-up subsidies show significantly positive effects.On balance, therefore, the reform seems to be moving the German labour market in the right direction.

Suggested Citation

  • Jacobi, Lena & Kluve, Jochen, 2006. "Before and After the Hartz Reforms: The Performance of Active Labour Market Policy in Germany," RWI Discussion Papers 41, RWI - Leibniz-Institut für Wirtschaftsforschung.
  • Handle: RePEc:zbw:rwidps:41
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    References listed on IDEAS

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    More about this item

    Keywords

    Active labour market policy; labour market reform; programme evaluation; Hartz laws;
    All these keywords.

    JEL classification:

    • J0 - Labor and Demographic Economics - - General
    • J88 - Labor and Demographic Economics - - Labor Standards - - - Public Policy
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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