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The employment effect of reforming a public employment agency

Andrey Launov () and Klaus Wälde ()

European Economic Review, 2016, vol. 84, issue C, 140-164

Abstract: By how much does an increase in operating effectiveness of a public employment agency (PEA) and a reduction of unemployment benefits reduce unemployment? Using a recent labour market reform in Germany as background, we find that an enhanced effectiveness of the PEA explains about 20% of the observed post-reform unemployment decline. The role of unemployment benefit reduction explains just about 5% of the observed decline. Due to disincentive effects resulting from the reform, the reform of the PEA could have had an even higher impact on unemployment reduction if there had been less focus on long-term unemployed workers.

Keywords: Employment agencies; Unemployment benefits labour market reform; Unemployment; Structural model (search for similar items in EconPapers)
JEL-codes: E24 J65 J68 (search for similar items in EconPapers)
Date: 2016
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Working Paper: The Employment Effect of Reforming a Public Employment Agency (2015) Downloads
Working Paper: The Employment Effect of Reforming a Public Employment Agency (2015) Downloads
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DOI: 10.1016/j.euroecorev.2015.08.008

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