Give them a break! Did activation of young welfare recipients overshoot in Germany? (A regression discontinuity analysis)

Joachim Wolff and Anton Nivorozhkin

VfS Annual Conference 2012 (Goettingen): New Approaches and Challenges for the Labor Market of the 21st Century from Verein für Socialpolitik / German Economic Association

Abstract: In Germany, due to special rules 15- to 24-year-old welfare recipients, registered with Public Employment Office, are highly targeted by mandatory activation policies. This paper investigates the effects of the special rules in terms of enhancing the (re-)employment probability, increasing earnings and reducing benefit dependency of targeted people in East and West Germany in the short- and the long-run. Using registry dataset of the inflow into unemployment and welfare over the period October 2005 to January 2006 the paper exploits the age related eligibility rule to identify a suitable counterfactual using a regression discontinuity design. Our estimates imply zero or negative effects of targeting for selected population subgroups. A possible explanation to our finding is that an excessive targeting of young welfare recipients by active labour market programmes may lead to a low quality matches between programmes and participants.

JEL-codes: C13 I38 J68 (search for similar items in EconPapers)
Date: 2012
New Economics Papers: this item is included in nep-eur and nep-lab
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc12:62046

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