Performance of Active Labour Market Policy in Germany
25
Table 2
Effects1 of the Hartz Reforms | |||
Measure |
Evidence |
Reform effect | |
before |
after | ||
(a) Increasing effectiveness and efficiency of labour market services and policy measures | |||
Placement Services | |||
General |
(+) |
(+) |
(+) Introduction of one-stop- |
Placement voucher2 |
n/a |
0 |
0 No significant effect on |
Assignment to private |
n/a |
0 |
0 No significant effect on |
Placement via temporary work |
n/a |
- |
- PSA reduce the employment |
Training |
0 older recent |
+ |
+ Exit rate to employment |
Public job creation |
- |
(-) |
- Measure remains detrimental (+) Magnitude of negative effect Impact on “employability” unclear |
(b) Activating the unemployed | |||
Wage subsidies to employers |
(+) |
+ |
+ 20-50 percentage points higher |
Start-up subsidies (Bridging |
(+)3 |
+ |
+ Subsidy significantly reduces risk |
Make work pay | |||
Wage protection for elderly |
n/a |
0 |
0 No significant effect. |
Minijobs |
n/a |
+ |
+ Reform caused large increase in |
Midijobs |
n/a |
(+) |
(+) Modest effect on creation of |
(c) Fostering employment demand by labour market deregulation
Temporary work deregulation n/a + + 23,700 additional employees in
temporary work 6 months after
reform (short-term). Deregulation
widely acclaimed
Fixed-term contracts for elderly n/a 0 0 No significant effect
1Labour market effects: + positive, (+) modestly positive, 0 zero, (-) modestly negative, - negative.
- 2Already since early 2002. - 3Pre-reform evidence on bridging allowance only.
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