Henrik Winterhager

Deregulating Job Placement in Europe: A Microeconometric Evaluation of an Innovative Voucher Scheme in Germany

Job placement vouchers can be regarded as a tool to spur competition between public and private job placement activities. The German government launched this instrument in order to end the public placement monopoly and to subsidize its private competitors. We exploit very rich administrative data provided for the first time by the Federal Employment Agency and apply propensity score matching as a method to solve the fundamental evaluation problem and to estimate the effect of the vouchers. We find positive treatment effects on the employment probability after one year of 6.5 percentage points in Western Germany and give a measure for deadweight loss.

Private Job Placement Services: A Microeconometric Evaluation for Germany

In recent years, coinciding with the discussion led in many OECD countries, Germany has started to contract out placement services for the unemployed to private agencies. Whereas in the Netherlands and Australia the whole system of employment services was reorganized at once, making an econometric evaluation difficult, only a small part of services has been contracted out so far in Germany. In this paper a microeconometric evaluation of this system using propensity score matching is presented. The effects on the employment probabilities of the unemployed are small and negative so far. A theoretical analysis suggests that this might be explained by deficits in the contract management.

Selektivität und direkte Wirkungen von Vermittlungsgutscheinen: Empirische Befunde aus der Einführungsphase

Abstract In April 2002 German government introduced job placement vouchers as a new instrument of active labour market policy to foster the transition of unemployed to jobs. This paper investigates the demand, the treatment effect of the treated and the economic efficiency of job placement vouchers issued from May 2003 to June 2004. The analysis employs a large sample of unemployed individuals from administrative data collected by the German Federal Employment Agency. 20 percent of the West German and 37 percent of the East German unemployed demanded a voucher. According to the microeconometric results the treatment impact of the treated is positive. 5 out of 100 voucher recipients found a job as a result of the instrument. An additional analysis of the cost and returns of the voucher scheme reveals that the return remains positive if no more than 70 per cent of the direct effects are compensated by indirect (substitution) effects.