Active Labor Market Policy in Germany – Is There a Successful Policy Strategy?

Michael Fertig, Christoph Schmidt and Hilmar Schneider ()

No 576, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Each year Germany and many other developed economies spend tens of billions of Euros on active measures of employment promotion with the explicit aim of contributing to the reduction of unemployment. Yet, high unemployment has universally been a persistent problem throughout the last two decades, raising the question as to the actual effect of the measures of employment promotion. This paper contributes to the received literature by investigating whether a specific strategy of active labor market policy measures can contribute to a significant reduction of unemployment on the (semi-) aggregate level of the local labor offices in Germany. To this end, we analyze ALMP in Germany in a spatially augmented regression framework. Our results suggest that a policy strategy focusing on monetary incentive schemes rather than on public employment programs is more successful.

Keywords: identification; spatial econometrics; evaluation (search for similar items in EconPapers)
JEL-codes: H43 J68 R23 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2002-09
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Citations: View citations in EconPapers (30)

Published - published in: Regional Science and Urban Economics, 2006, 36 (3), 399-430

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Journal Article: Active labor market policy in Germany--Is there a successful policy strategy? (2006)
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