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Intensifying the use of benefit sanctions: an effective tool to shorten welfare receipt and speed up transitions to employment?

  • Boockmann, Bernhard
  • Thomsen, Stephan L.
  • Walter, Thomas

Benefit sanctions imposed on non-compliant welfare recipients are a new element in the German welfare system. In practice, the sanction policy and the application of sanctions vary considerably across the 439 welfare agencies. Based on combined administrative and survey data, these differences are used as instrumental variables to estimate the effect of sanctions on the drop-out from welfare and the transition to employment. The estimated local average treatment effect (LATE) is an estimate of the effctiveness of an intensified use of sanctions. The results show that tightening sanction policy would be quite effective.

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Paper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number 09-072.

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Date of creation: 2009
Date of revision:
Handle: RePEc:zbw:zewdip:09072
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  1. Fredriksson, Peter & Holmlund, Bertil, 2003. "Improving Incentives in Unemployment Insurance: A Review of Recent Research," Working Paper Series 2003:10, Uppsala University, Department of Economics.
  2. Joshua D. Angrist & Guido W. Imbens, 1995. "Identification and Estimation of Local Average Treatment Effects," NBER Technical Working Papers 0118, National Bureau of Economic Research, Inc.
  3. Lalive, Rafael & van Ours, Jan C. & Zweimüller, Josef, 2002. "The Effect of Benefit Sanctions on the Duration of Unemployment," IZA Discussion Papers 469, Institute for the Study of Labor (IZA).
  4. Gerard J. van den Berg & Bas van der Klaauw & Jan C. van Ours, 2004. "Punitive Sanctions and the Transition Rate from Welfare to Work," Journal of Labor Economics, University of Chicago Press, vol. 22(1), pages 211-241, January.
  5. repec:iab:iabzaf:v:40:i:1:p:45-64 is not listed on IDEAS
  6. Wilke, Ralf A., 2003. "Eine empirische Analyse von Sanktionen für Arbeitslose in Westdeutschland während der 1980er und 1990er Jahre," ZEW Discussion Papers 03-71, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  7. Michael Svarer, 2007. "The Effect of Sanctions on the Job Finding Rate: Evidence from Denmark," Economics Working Papers 2007-10, School of Economics and Management, University of Aarhus.
  8. Jaap H. Abbring & Gerard J. Berg & Jan C. Ours, 2005. "The Effect of Unemployment Insurance Sanctions on the Transition Rate from Unemployment to Employment," Economic Journal, Royal Economic Society, vol. 115(505), pages 602-630, 07.
  9. Barbara Hofmann, 2008. "Work Incentives? Ex Post Effects of Unemployment Insurance Sanctions - Evidence from West Germany," CESifo Working Paper Series 2508, CESifo Group Munich.
  10. Douglas Staiger & James H. Stock, 1997. "Instrumental Variables Regression with Weak Instruments," Econometrica, Econometric Society, vol. 65(3), pages 557-586, May.
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