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Do German Welfare-to-Work Programmes Reduce Welfare Dependency and Increase Employment?

abstract During the last decade, many Western economies reformed their welfare system with the aim of activating welfare recipients by increasing welfare-to-work programmes (WTWP) and job-search enforcement. We evaluate the short-term effects of three important German WTWP implemented after a major reform in January 2005
(‘Hartz IV’), namely short training, further training with a planned duration of up to three months and public workfare programmes (‘One-Euro-Jobs’). Our analysis is based on a combination of large-scale survey and administrative data that is rich with respect to
individual, household, agency level and regional information. We use this richness of the data to base the econometric evaluation on a selection-on-observables approach. We find that short-term training programmes on average increase their participants’ employment
perspectives. There is also considerable effect heterogeneity across different subgroups of participants that could be exploited to improve the allocation of welfare recipients to the specific programmes and thus increase overall programme effectiveness.
   
type journal paper
   
keywords Welfare-to-work policies, propensity score matching, programme evaluation, panel data, targeting
   
language Deutsch
kind of paper journal article
date of appearance 5-2011
journal German Economic Review
publisher Wiley-Blackwell (Malden, MA)
ISSN 1465-6485
ISSN (online) 1468-0475
DOI 10.1111/j.1468-0475.2010.00515.x
volume of journal 12
number of issue 2
page(s) 182-204
review double-blind review
   
citation Huber, M., Lechner, M., & Wunsch, C. (2011). Do German Welfare-to-Work Programmes Reduce Welfare Dependency and Increase Employment?. German Economic Review, 12(2), 182-204, DOI:10.1111/j.1468-0475.2010.00515.x.