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Lena Jacobi and Jochen Kluve
4. (a) Increasing Effectiveness and Efficiency of Labour Market Services and Policy Measures
Major policy changes aiming at improving effectiveness and efficiency of
already existing measures took place in the realm of placement services,
training and job creation schemes. In the following, we will discuss findings
from evaluation studies of these measures before and after the reform. Other
active policy measures that were re-designed under the reform are discussed
in the next section.
Placement Services
There are only two studies on the effectiveness of placement services before
the reform. The DEA-based benchmarking study by Mosley et al. (2003)
compares the relative efficiency in terms of activity (number of placements
and programme entrants in relation to staff inputs) and effectiveness (tran-
sitions into regular employment) of West German local employment offices.
The analysis is complemented with case studies of eight employment offices.
The results indicate strong differences in relative efficiency. The authors find
that exogenous and endogenous factors each explain roughly 50% of variation
in efficiency, respectively. They suggest that average efficiency of labour
market offices could be increased by 19%. Hujer et al. (2005) study the effects
of two pilot measures of job search assistance (“Stellenmarktoffensive”) in
2001-2002 in the West German federal state of Hessen. The regional em-
ployment agency published a magazine for employers containing “em-
ployment wanted” advertisements among other things. The study finds
positive effects of this measure, especially for women. Furthermore, the em-
ployment agencies offered courses on job search activities that advise on
writing application letters, CVs, participating in job interview etc. Although
effects vary across groups, in the general picture these measures do not
produce positive results.
The Hartz-reform converted the former employment offices into costumer-
orientated one-stop-centres. These are assessed in the study by WZB/infas
(2005) using a conditional Difference-in-Differences-analysis that exploits the
fact that one-stop-centres have been introduced at different points in time.
Ten employment service agencies that have already transformed into
one-stop-centres are matched to ten agencies that have not. Data is used from
the inflow into unemployment of the respective agencies. The results indicate
positive effects of one-stop-centres on the integration into regular em-
ployment, though the effects are not significant. This might be due to the fact
that the number of agencies used in the analysis is small and the observation
period at the present time is a maximum of nine months. The effects are more
positive in East Germany, where labour market conditions are worse, and
seem to work better for men than for women.