Before and After the Hartz Reforms: The Performance of Active Labour Market Policy in Germany

Lena Jacobi () and Jochen Kluve ()
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Lena Jacobi: RWI

No 2100, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Having faced high unemployment rates for more than a decade, the German government implemented a comprehensive set of labour market reforms during the period 2003-2005. This paper describes the economic and institutional context of the German labour market before and after these so-called Hartz reforms. Focussing on active policy measures, we delineate the rationale for reform and its main principles. As results of programme evaluation studies post-reform have become available just now, we give a first assessment of the effectiveness of key elements of German ALMP before and after the Hartz reforms. The evidence indicates that the re-organisation of public employment services was mainly successful, with the exception of the outsourcing of services. Re-designing training programmes seems to have improved their effectiveness, while job creation schemes continue to be detrimental for participants' employment prospects. Wage subsidies and start-up subsidies show significantly positive effects. On balance, therefore, the reform seems to be moving the German labour market in the right direction.

Keywords: programme evaluation; Active Labour Market Policy; labour market reform (search for similar items in EconPapers)
JEL-codes: J0 J68 J88 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2006-04
New Economics Papers: this item is included in nep-eec, nep-his and nep-lab
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Citations: View citations in EconPapers (88)

Published - published in: Journal for Labour Market Research / Zeitschrift für Arbeitsmarktforschung, 2007, 40 (1), 45-64

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