Should Local Public Employment Services be Merged with the Local Social Benefit Administrations?

The second dummy variable characterises how well the matching of long-term
unemployed to job vacancies is integrated into the case management approach. It is one if
the vacancy recruitment services generally communicate new vacancies to case managers
responsible for the long-term unemployed, and zero if the vacancy recruitment service
primarily matches long-term unemployed and job vacancies on its own without consulting
the case managers. The integrated approach seems to be positively correlated (although not
statistically significant) with the job finding rate and is adopted by 14.5 % of regions with
Approved Local Providers and by 6.7 % of regions with Joint Local Agencies. The estimates
- although not significantly different from zero - suggest that an integrated matching
approach increases the job finding rate of long-term unemployed by around 2 %.

The fact that organisational characteristics chosen by the Approved Local Providers are
positively correlated with the job finding rate of long-term unemployed and the fact that the
indicator variable for Approved Local Providers gets more negative indicates again that
Approved Local Providers have chosen the better organisational structure.

Table 5: Estimates of the relationship of Approved Local Providers and the job finding rate

Standard errors are given in parentheses. Coefficients with * and ** indicate significance at a 5 % and 1 %
level, respectively. Observations are clustered at the level of the 16 German states and weighted accordingly.

In column 4 we include three variables that characterise the intensity and speed with
which long-term unemployed are activated; the length of the first interview, the fraction of

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