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

Author

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

Abstract

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.

Suggested Citation

  • Boockmann, Bernhard & Thomsen, Stephan L. & Walter, Thomas, 2009. "Intensifying the use of benefit sanctions: an effective tool to shorten welfare receipt and speed up transitions to employment?," ZEW Discussion Papers 09-072, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  • Handle: RePEc:zbw:zewdip:09072
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    References listed on IDEAS

    as
    1. Svarer, Michael, 2007. "The Effect of Sanctions on the Job Finding Rate: Evidence from Denmark," IZA Discussion Papers 3015, Institute for the Study of Labor (IZA).
    2. 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, July.
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    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. Rafael Lalive & Jan C. van Ours & Josef Zweimüller, 2005. "The Effect Of Benefit Sanctions On The Duration Of Unemployment," Journal of the European Economic Association, MIT Press, vol. 3(6), pages 1386-1417, December.
    6. Peter Fredriksson & Bertil Holmlund, 2006. "Improving Incentives in Unemployment Insurance: A Review of Recent Research," Journal of Economic Surveys, Wiley Blackwell, vol. 20(3), pages 357-386, July.
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    11. repec:iab:iabzaf:v:40:i:1:p:45-64 is not listed on IDEAS
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    Citations

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    Cited by:

    1. van der Klaauw, Bas & van Ours, Jan C., 2010. "Carrot and Stick: How Reemployment Bonuses and Benefit Sanctions Affect Job Finding Rates," IZA Discussion Papers 5055, Institute for the Study of Labor (IZA).
    2. 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.
    3. Boockmann, Bernhard & Osiander, Christopher & Stops, Michael & Verbeek, Hans, 2013. "Effekte von Vermittlerhandeln und Vermittlerstrategien im SGB II und SGB III (Pilotstudie) : Abschlussbericht an das IAB durch das Institut für Angewandte Wirtschaftsforschung e. V. (IAW), Tübingen," IAB-Forschungsbericht 201307, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    4. Busk, Henna, 2016. "Sanctions and the exit from unemployment in two different benefit schemes," Labour Economics, Elsevier, vol. 42(C), pages 159-176.
    5. Milan Vodopivec, 2013. "Introducing unemployment insurance to developing countries," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-23, December.
    6. Rainer Eppel & Helmut Mahringer & Andrea Weber, 2014. "Job Search Behaviour and Job Search Success of the Unemployed," WIFO Working Papers 471, WIFO.
    7. Jan Hagemejer & Joanna Tyrowicz & Jan Svejnar, 2014. "Measuring the Causal Effect of Privatization on Firm Performance," Working Papers 2014-14, Faculty of Economic Sciences, University of Warsaw.
    8. Gerards, Ruud & Welters, Ricardo, 2016. "Impact of financial pressure on unemployed job search, job find success and job quality," ROA Research Memorandum 008, Maastricht University, Research Centre for Education and the Labour Market (ROA).
    9. Jasper Lukkezen & Dennis Bonam (VU en Tinbergen), 2014. "Government spending shocks, sovereign risk and the exchange rate regime," CPB Discussion Paper 263, CPB Netherlands Bureau for Economic Policy Analysis.
    10. Pipinis, Dimitris & Taylor, Sarah & Tuffin, Andrew & Ross, Colin & Tse, Max, 2016. "Benefit Sanctions: Detailed Methodology," MPRA Paper 80012, University Library of Munich, Germany.
    11. Schneider, Hilmar & Uhlendorff, Arne & Zimmermann, Klaus F., 2010. "Mit Workfare aus der Sozialhilfe? Lehren aus einem Modellprojekt," IZA Standpunkte 33, Institute for the Study of Labor (IZA).
    12. Koning, Pierre, 2015. "Making work pay for the indebted? Assessing the effects of debt services on welfare recipients," Labour Economics, Elsevier, vol. 34(C), pages 152-161.
    13. Koning, Pierre, 2013. "Making Work Pay for the Indebted: The Effect of Debt Services on the Exit Rates of Unemployed Individuals," IZA Discussion Papers 7873, Institute for the Study of Labor (IZA).
    14. Sebastien Menard & Solenne Tanguy, 2017. "Revisiting Hopenhayn and Nicolini 's optimal unemployment insurance with job search monitoring and sanctions," TEPP Working Paper 2017-08, TEPP.

    More about this item

    Keywords

    benefit sanctions; welfare recipients; IV; LATE;

    JEL classification:

    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models

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