The Employment Effects of Job Creation Schemes in Germany: A Microeconometric Evaluation

By Marco Caliendo, Reinhard Hujer, Stephan L. Thomsen. Social Science Research Network, 2008

191 citations recorded by the source corpus.

In this chapter, we evaluate the employment effects of job-creation schemes (JCS) on the participating individuals in Germany. JCS are a major element of active labour market policy in Germany and are targeted at long-term unemployed and other hard-to-place individuals. Access to very informative administrative data of the Federal Employment Agency justifies the application of a matching estimator and allows us to account for individual (group-specific) and regional effect heterogeneity. We extend previous studies for Germany in four directions. First, we are able to evaluate the effects on regular (unsubsidised) employment. Second, we observe the outcomes of participants and non-participants for nearly three years after the programme starts and can therefore analyse medium-term effects. Third, we test the sensitivity of the results with respect to various decisions that have to be made during implementation of the matching estimator. Finally, we check if a possible occurrence of a specific form of ‘unobserved heterogeneity’ distorts our interpretation. The overall results are rather discouraging, since the employment effects are negative or insignificant for most of the analysed groups. One exception are long-term unemployed individuals who benefit from participation at the end of our observation period. Hence, one policy implication is to address the programmes to this problem group more closely.

Subfields: Economics and Econometrics, Statistics and Probability

View Paper: https://www.semanticscholar.org/paper/a2a88d3ec8ae5d0b1c99949b161263997069e370

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Citations in the corpus

Assessing the Impact of Agricultural Technology Adoption on Farmers' Well-being Using Propensity-Score Matching Analysis in Rural China* (2010, result): “Both approaches produce similar results when estimating the probability of an individual farmer being an adopter or a non-adopter (Caliendo et al., 2005).”
Active Labor Market Policies (2016, background): “The rate of subsidies may vary as well as the length of contracts: Caliendo et al. (2005) quote subsidy rates that vary from 30% to 75% of the total cost and periods that vary from 6 to 12 months.”
Sensitivity Analysis for Average Treatment Effects (2007, methodology): “…for continuous-outcome variables, whereas our command mhbounds focuses on binary-outcome variables (e.g., employment versus unemployment), which are often used in the evaluation literature.3 You can find recent applications of this approach in Aakvik (2001) or Caliendo, Hujer, and Thomsen (2005).”
Some Practical Guidance for the Implementation of Propensity Score Matching (2008, methodology): “by Lechner (1999), Sianesi (2004) and Caliendo et al. (2007). One possible problem with the SB approach is that one does not have a clear indication for the success of the matching procedure, even though in most empirical studies an SB below 3% or 5% after matching is seen as sufficient.”
The effectiveness of European active labor market programs (2010, background): “(1) (2) (3) (4) t8:4 Negative treatment estimate Positive treatment estimate Negative treatment estimate Positive treatment estimate t8:5 Marginal effect t Marginal effect t Marginal effect t Marginal effect t t8:6 (a) Type of program and target group (omitted: training; adults/disabled) t8:7 Direct”
Before and after the Hartz Reforms: The Performance of Active Labour Market Policy in Germany (2006, unknown): “Caliendo et al. (2003) use the recently derived administrative data for the years 2000-2002, which provides information on programme effects in West Germany for the first time.”
The microeconometric estimation of treatment effects—An overview (2006, result): “That is, we observe the outcome with 1See e.g. Caliendo, Hujer, and Thomsen (2005) for Germany, Sianesi (2004) for Sweden, Gerfin and Lechner (2002) for Switzerland or van den Berg, van der Klaauw, and van Ours (2004) for the Netherlands.”
Turning Unemployment into Self-Employment: Effectiveness of Two Start-Up Programmes (2008, methodology): “This is a common approach used in many evaluation studies, including those by Lechner (1999), Sianesi (2004) and Caliendo et al. (2008).”
Start-Up Subsidies for the Unemployed: Long-Term Evidence and Effect Heterogeneity (2011, background): “…vocational training, short-term training, wage subsidies and job creation schemes and show consistently negative effects for job creation schemes (in line with Caliendo, Hujer, and Thomsen, 2008) and mostly positive but not always significant effects for the other 3 programs under consideration.”