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Should welfare administration be centralized or decentralized? Evidence from a policy experiment

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  • Boockmann, Bernhard
  • Thomsen, Stephan L.
  • Walter, Thomas
  • Göbel, Christian
  • Huber, Martin

Abstract

The 2005 reform of the German welfare system introduced two competing organizational models for welfare administration. In most districts, a centralized organization was established where local welfare agencies are bound to central directives. At the same time, 69 districts were allowed to opt for a decentralized organization. We evaluate the relative success of both types of organizations. Compared to centralized organization, decentralized organization of welfare administration has a negative effect on the transition of male welfare recipients to self-sufficient employment, but it does not affect employment in combination with continuing welfare support. No significant effects were found for women.

Suggested Citation

  • Boockmann, Bernhard & Thomsen, Stephan L. & Walter, Thomas & Göbel, Christian & Huber, Martin, 2010. "Should welfare administration be centralized or decentralized? Evidence from a policy experiment," ZEW Discussion Papers 10-106, ZEW - Leibniz Centre for European Economic Research.
    • Handle: RePEc:zbw:zewdip:10106
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    References listed on IDEAS

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    1. W. Eichhorst & M. Grienberger-Zingerle & R. Konle-Seidl, 2008. "Activation Policies in Germany: From Status Protection to Basic Income Support," Springer Books, in: Werner Eichhorst & Otto Kaufmann & Regina Konle-Seidl (ed.), Bringing the Jobless into Work?, pages 17-67, Springer.
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    Cited by:

    1. Jeremias Nieminen & Ohto Kanninen & Hannu Karhunen, 2023. "The decentralization of public employment services and local governments’ responses to incentives," Journal of Economic Geography, Oxford University Press, vol. 23(6), pages 1371-1395.
    2. Oliver Falck & Siegfried Schönherr, 2016. "An Economic Reform Agenda for Croatia: a comprehensive economic reform package prepared for the Croatian Statehood Foundation," ifo Forschungsberichte, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 70, October.
    3. Mergele, Lukas & Weber, Michael, 2020. "Public employment services under decentralization: Evidence from a natural experiment," Journal of Public Economics, Elsevier, vol. 182(C).
    4. Lukas Mergele & Michael Weber & Michael Weber, 2020. "Jobcenter: Optionskommunen vermitteln Arbeitslose seltener in Beschäftigung," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 73(02), pages 39-44, February.
    5. Holzner, Christian & Munz, Sonja, 2013. "Should local public employment services be merged with local social benefit administrations?," Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 46(2), pages 83-102.
    6. Mergele, Lukas & Weber, Michael, 2020. "Public employment services under decentralization: Evidence from a natural experiment," Journal of Public Economics, Elsevier, vol. 182(C).
    7. Regina T. Riphahn & Christoph Wunder, 2016. "State dependence in welfare receipt: transitions before and after a reform," Empirical Economics, Springer, vol. 50(4), pages 1303-1329, June.
    8. Ohto Kanninen & Hannu Karhunen & Jeremias Nieminen, 2021. "Behavior and Effectiveness of Decentralized Employment Offices," Working Papers 332, Työn ja talouden tutkimus LABORE, The Labour Institute for Economic Research LABORE.
    9. Ohto Kanninen & Hannu Karhunen & Jeremias Nieminen, "undated". "Effect of Secondary Education on Cognitive and Non-cognitive Skills," Working Papers 337, Työn ja talouden tutkimus LABORE, The Labour Institute for Economic Research LABORE.
    10. Michael Weber, 2016. "The short-run and long-run effects of decentralizing public employment services," ifo Working Paper Series 209, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    11. Lukas Mergele, 2016. "Are there gains from decentralizing public employment offices?," Working Papers 2015020, Berlin Doctoral Program in Economics and Management Science (BDPEMS).
    12. Wolfgang Nagl & Michael Weber, 2016. "Stuck in a trap? Long-term unemployment under two-tier unemployment compensation schemes," ifo Working Paper Series 231, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.

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    More about this item

    Keywords

    Welfare System; Organization; Decentralization; Labor Market Integration;
    All these keywords.

    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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