Some Econometric Evidence on the Effectiveness of Active Labour Market Programmes in East Germany

In this paper we summarise our previous results on the effectiveness of different kinds of labour market training programmes as well as employment programmes in East Germany after unification. All the studies use the microeconometric evaluation approach and are based on different types of matching estimators. We find some positive earnings effect for on-the-job training and also some positive employment effects for employment programmes. No such effects appear for public sector sponsored (off-the-job) training programmes. Generally, the scope of such analysis is very much hampered by the insufficient quality and quantity of the data available for East Germany. Although in particular the results for public sector sponsored training programmes raise serious doubts about the effectiveness of these programmes, any definite policy conclusion from this and other studies about active labour market policy in East Germany would probably be premature.http://deepblue.lib.umich.edu/bitstream/2027.42/39702/3/wp318.pd

Some Econometric Evidence on the Effectiveness of Active Labour Market Programmes in East Germany

In this paper we summarise our previous results on the effectiveness of different kinds of labour market training programmes as well as employment programmes in East Germany after unification. All the studies use the microeconometric evaluation approach and are based on different types of matching estimators. We find some positive earnings effect for on-the-job training and also some positive employment effects for employment programmes. No such effects appear for public sector sponsored (off-the-job) training programmes. Generally, the scope of such analysis is very much hampered by the insufficient quality and quantity of the data available for East Germany. Although in particular the results for public sector sponsored training programmes raise serious doubts about the effectiveness of these programmes, any definite policy conclusion from this and other studies about active labour market policy in East Germany would probably be premature.East German labor markets, treatment effects, training, panel data, matching

Does Leaving Welfare Improve Health? Evidence for Germany

Using exceptionally rich linked administrative and survey information on German welfare recipients we investigate the health effects of transitions from welfare to employment and of assignments to welfare-to-work programmes. Applying semi-parametric propensity score matching estimators we find that employment substantially increases (mental) health. The positive effects are mainly driven by males and individuals with bad initial health conditions and are largest for males with poor health. In contrast, the effects of welfare-to-work pro-grammes, including subsidized jobs, are ambiguous and statistically insignificant for most outcomes. Robustness checks that include a semi-parametric instrumental variable approach do not provide reasons for concern.Welfare programs, health effects

How to control for many covariates? Reliable estimators based on the propensity score

We investigate the finite sample properties of a large number of estimators for the average treatment effect on the treated that are suitable when adjustment for observable covariates is required, like inverse pro¬bability weighting, kernel and other variants of matching, as well as different parametric models. The simulation design used is based on real data usually employed for the evaluation of labour market programmes in Germany. We vary several dimensions of the design that are of practical importance, like sample size, the type of the outcome variable, and aspects of the selection process. We find that trimming individual observations with too much weight as well as the choice of tuning parameters is important for all estimators. The key conclusion from our simulations is that a particular radius matching estimator combined with regression performs best overall, in particular when robustness to misspecifications of the propensity score is considered an important property.Propensity score matching, kernel matching, inverse probability weighting, selection on observables, empirical Monte Carlo study, finite sample properties

How to Control for Many Covariates? Reliable Estimators Based on the Propensity Score

We investigate the finite sample properties of a large number of estimators for the average treatment effect on the treated that are suitable when adjustment for observable covariates is required, like inverse probability weighting, kernel and other variants of matching, as well as different parametric models. The simulation design used is based on real data usually employed for the evaluation of labour market programmes in Germany. We vary several dimensions of the design that are of practical importance, like sample size, the type of the outcome variable, and aspects of the selection process. We find that trimming individual observations with too much weight as well as the choice of tuning parameters is important for all estimators. The key conclusion from our simulations is that a particular radius matching estimator combined with regression performs best overall, in particular when robustness to misspecifications of the propensity score is considered an important property.propensity score matching, kernel matching, inverse probability weighting, selection on observables, empirical Monte Carlo study, finite sample properties

Does Leaving Welfare Improve Health? Evidence for Germany

Using exceptionally rich linked administrative and survey information on German welfare recipients we investigate the health effects of transitions from welfare to employment and of assignments to welfare-to-work programmes. Applying semi-parametric propensity score matching estimators we find that employment substantially increases (mental) health. The positive effects are mainly driven by males and individuals with bad initial health conditions and are largest for males with poor health. In contrast, the effects of welfare-to-work programmes, including subsidized jobs, are ambiguous and statistically insignificant for most outcomes. Robustness checks that include a semi-parametric instrumental variable approach do not provide reasons for concern.welfare programs, health effects

Do German Welfare-to-Work Programmes Reduce Welfare and Increase Work?

Many Western economies have reformed their welfare systems with the aim of activating welfare recipients by increasing welfare-to-work programmes and job search enforcement. We evaluate the three most important German welfare-to-work programmes implemented after a major reform in January 2005 ("Hartz IV"). Our analysis is based on a unique combination of large scale survey and administrative data that is unusually rich with respect to individual, household, agency level, and regional information. We use this richness to allow for a selection-on-observables approach when doing the econometric evaluation. We find that short-term training programmes on average increase their participants' employment perspectives and that all programmes induce further programme participation. We also show that there is considerable effect heterogeneity across different subgroups of participants that could be exploited to improve the allocation of welfare recipients to the specific programmes and thus increase overall programme effectivenessWelfare-to-work policies, propensity score matching, programme evaluation, panel data, targeting

An Evaluation of Public Employment Programmes in the East German State of Sachsen-Anhalt

In East Germany, active labour market policies (ALMPs) are used on a large scale to contain fast rising unemployment after unification. This paper evaluates the effects for participants in public employment programmes (PEPs), that are an important part of ALMPs. It focuses on individual unemployment probabilities. By concentrating on the state of Sachsen-Anhalt, the econometric analysis can use a new and large panel, the Arbeitsmarktmonitor Sachsen-Anhalt. We aim at nonparametric identification of the effects of PEPs by combining the use of comparison groups with differencing over time to correct for selection effects. Our results indicate that PEP participation reduces the unemployment risk of the participants

Public Sector Sponsored Continuous Vocational Training in East Germany : Institutional Arrangements, Participants, and Results of Empirical Evaluations

After unification of the East and West German economies in July 1990 the public sector devoted substantial resources to train the labour force of the former centrally planned East German economy. In this paper we describe the basic trends of the rules and regulations governing these efforts. We supplement this description with empirical stylized facts. Additionally, we report evaluations of the effects of this policy for training participants beginning their training between mid 1990 and early 1993. These evaluations are based on micro data from the Socio-economic Panel (1990-1994) which allows us to follow the individuals' labour market status before and after training on a monthly and yearly basis, respectively. Our general findings of these evaluations suggest that there are no positive effects on such measures as post-training unemployment risk or earnings