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Thumbscrews for Agencies or Individuals? How to reduce unemployment

Listed author(s):
  • Launov, Andrey
  • Wälde, Klaus

To which extent does an increase in effectiveness of a public employment agency on the one hand and a reduction of unemployment benefits on the other reduce unemployment? Using the recent labour market reform in Germany we find that an improved agency explains substantial part of the observed post-reform unemployment decline: 34%. If disincentive effects of the agency reform were avoided, this impact would have become 51%. Contribution of benefit reduction, to the contrary, is modest: 7%. We underline public employment agency as a much more promising target in restructuring welfare states, in contrast to commonly discussed unemployment benefits.

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File URL: https://www.econstor.eu/bitstream/10419/100558/1/VfS_2014_pid_254.pdf
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Paper provided by Verein für Socialpolitik / German Economic Association in its series Annual Conference 2014 (Hamburg): Evidence-based Economic Policy with number 100558.

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Date of creation: 2014
Handle: RePEc:zbw:vfsc14:100558
Contact details of provider: Web page: http://www.socialpolitik.org/
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