Performance of Active Labour Market Policy in Germany
11
employment, “Clients for counselling and activation” (Beratungskunden
Aktivieren) range second and mainly need to be activated in their job search.
“Clients for counselling and support” (Beratungskunden Fordern) need more
attention and will likely be assigned to a programme, while “Clients in need of
supervision” (Betreuungskunden) need special attention since they face the
lowest chances of re-employment. Each type is linked to an action
programme, defining the available measures for that type ofjobseeker. Active
labour market policy measures are available mainly for the types II “coun-
selling and activating” and III “counselling and supporting”. The type I
“market client” is expected to re-integrate without special assistance, while
the fourth type, “supervising”, is deemed not benefiting from any measure and
excluded from participation.
Many active policy measures were re-designed in terms of their target popu-
lation. For example, since the reform, selection into training measures delib-
erately targets cream skimming in order to choose those clients who will
benefit most from training. Only those clients will be admitted who are con-
jectured to have a 70% probability of finding a job after the measure. Ac-
cordingly, training providers have to produce a 70% success rate of respective
participants in order to be contracted by the employment agency. In contrast,
job creation measures are re-designed for merely targeting the very
hard-to-place unemployed. That means public employment shall constitute
market replacement and thereby preserve employability for those who are not
expected to find a way back into regular employment in the near future. In-
centives for unemployed workers to take up public employment rather than
regular employment were reduced as participants can no longer restore eligi-
bility for unemployment benefits after completing the measure. The re-
strictive targeting of training and job creation schemes as well as the reduction
of programme durations induced a further reduction of participants and
spending for these measures. On average, participation in training will take
place at an earlier stage in the unemployment spell.
Last but not least, the need for rigorous scientific evaluation of programme ef-
fectiveness, in order to be able to continuously optimise existing programmes
on the basis of conclusive empirical evidence, was recognized by policy
makers, and a corresponding evaluation mandate was implemented with the
Hartz reforms. Hence, the Hartz reforms constitute the first major reform in
the history of the German welfare state that is accompanied by a compre-
hensive scientific evaluation on behalf of the government. The process started
with two competing pilot studies developing a conceptual framework for the
evaluation (Fertig et al. 2004; Hagen, Spermann 2004) and subsequently was
put out to tender. Currently more than 20 economic and sociological research
institutes with about 100 researchers are involved in the evaluation
(Bundesregierung 2006 for details of the set-up).