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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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    1. Fitzenberger, Bernd & Speckesser, Stefan, 2000. "Zur wissenschaftlichen Evaluation der aktiven Arbeitsmarktpolitik in Deutschland: Ein Überblick," ZEW Discussion Papers 00-06, ZEW - Leibniz Centre for European Economic Research.
    2. Annette Bergemann & Bernd Fitzenberger & Stefan Speckesser, 2009. "Evaluating the dynamic employment effects of training programs in East Germany using conditional difference-in-differences," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 24(5), pages 797-823.
    3. Reinhard Hujer & Stephan Thomsen & Christopher Zeiss, 2006. "The effects of vocational training programmes on the duration of unemployment in Eastern Germany," AStA Advances in Statistical Analysis, Springer;German Statistical Society, vol. 90(2), pages 299-321, June.
    4. Bernd Fitzenberger & Stefan Speckesser, 2007. "Employment effects of the provision of specific professional skills and techniques in Germany," Empirical Economics, Springer, vol. 32(2), pages 529-573, May.
    5. Marco Caliendo & Viktor Steiner, 2005. "Aktive Arbeitsmarktpolitik in Deutschland: Bestandsaufnahme und Bewertung der mikroökonomischen Evaluationsergebnisse," Discussion Papers of DIW Berlin 515, DIW Berlin, German Institute for Economic Research.
    6. Fertig, Michael & Kluve, Jochen & Schmidt, Christoph M. & Apel, Helmut & Friedrich, Werner & Hägele, Helmut, 2004. "Die Hartz-Gesetze zur Arbeitsmarktpolitik: Ein umfassendes Evaluationskonzept," RWI Schriften, RWI - Leibniz-Institut für Wirtschaftsforschung, volume 74, number 74.
    7. Eichler, Martin & Lechner, Michael, 2002. "An evaluation of public employment programmes in the East German State of Sachsen-Anhalt," Labour Economics, Elsevier, vol. 9(2), pages 143-186, April.
    8. Reinowski, Eva & Schultz, Birgit & Wiemers, Jürgen, 2003. "Evaluation von Maßnahmen der aktiven Arbeitsmarktpolitik mit Hilfe eines iterativen Matching-Algorithmus - Eine Fallstudie über langzeitarbeitslose Maßnahmeteilnehmer in Sachsen," IWH Discussion Papers 173, Halle Institute for Economic Research (IWH).
    9. Eva Reinowski & Birgit Schultz & Jürgen Wiemers, 2005. "Evaluation of Further Training Programmes with an Optimal Matching Algorithm," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 141(IV), pages 585-616, December.
    10. Lechner, Michael, 1999. "Earnings and Employment Effects of Continuous Off-the-Job Training in East Germany after Unification," Journal of Business & Economic Statistics, American Statistical Association, vol. 17(1), pages 74-90, January.
    11. repec:zbw:iwhdps:188 is not listed on IDEAS
    12. Caliendo, Marco & Hujer, Reinhard & Thomsen, Stephan L., 2005. "The Employment Effects of Job Creation Schemes in Germany: A Microeconometric Evaluation," IZA Discussion Papers 1512, Institute of Labor Economics (IZA).
    13. repec:zbw:iwhdps:173 is not listed on IDEAS
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    More about this item

    Keywords

    Active labour market policy; labour market reform; programme evaluation; Hartz laws;

    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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