24
Lena Jacobi and Jochen Kluve
Fixed-term Contracts for the Elderly
The effect of old-age workers being exempt from restrictions on fixed-term
contracts is assessed by RWI Essen et al. (2005) using a Difference-in-
Difference estimator. Workers just above the minimum age for exemption (52
to 53 years) constitute the treatment group, while workers just below this age
(50-51 years) are the control group. The exemption of old workers above 52
years of age from restrictions on fixed-term contracts is expected to increase
the number of old workers holding fixed-term contracts. The analysis does not
reveal any significant treatment effects. This might be due, however, to the
short observation period, since currently data are available for only three
months after the exemption was introduced.
Summary of Policy Effectiveness Before and After Hartz
Table 2 presents an overview of the effectiveness of various policy measures
before and after Hartz. The table follows the previous structure of Section 4
(also used in Section 3) in distinguishing between reform elements that aim at
(a) increasing effectiveness and efficiency of labour market services and policy
measures, (b) activating the unemployed, and (c) deregulating the labour
market. The second column summarises the estimated effects of the respective
policy arising from the available set of evaluation studies conducted before
Hartz. Obviously, for several policies, such as the newly introduced placement
vouchers, such an assessment is not applicable. The third column summarises
the results obtained for each measure in the comprehensive evaluation on the
effectiveness of the Hartz reforms (cf. also Bundesregierung 2006; Kaltenborn
et al. 2006). Column 4 then intends to assess the “before-after difference”,
which - with explicit caution - could be interpreted as a „reform effect“ of the
measure. The caution results from the fact that, whereas the before-after dif-
ference may indeed be caused by the redesign of the measure, it is also con-
ceivable that the overall change in the institutional framework of the labour
and placement markets is responsible for differentially effective policies pre-
and post-Hartz. Also, some evaluation studies before Hartz are quite distinct
in their specific focus from those conducted after Hartz - e.g. the studies con-
cerning general placement services - and hence not directly comparable.
Another caveat when interpreting the results is the fact that the post-reform
observation period is short-term only.
The table summarizes the results discussed in more detail in the previous sub-
sections. Training and public job creation schemes, which were both already
used and evaluated extensively before the reform, appear to be improved. The
“improvement” of public job creation schemes, however, unfortunately
merely implies the fact that since the reform they appear less detrimental for
participants’ employment prospects than before. For another re-designed