Thumbscrews for Agencies or Individuals? How to reduce unemployment

Andrey Launov () and Klaus Wälde

VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy from Verein für Socialpolitik / German Economic Association

Abstract: To which extent does an increase in effectiveness of a public employment agency on the one hand and a reduction of unemployment benefits on the other reduce unemployment? Using the recent labour market reform in Germany we find that an improved agency explains substantial part of the observed post-reform unemployment decline: 34%. If disincentive effects of the agency reform were avoided, this impact would have become 51%. Contribution of benefit reduction, to the contrary, is modest: 7%. We underline public employment agency as a much more promising target in restructuring welfare states, in contrast to commonly discussed unemployment benefits.

JEL-codes: E24 J65 J68 (search for similar items in EconPapers)
Date: 2014
New Economics Papers: this item is included in nep-mac
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc14:100558

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