Active labour market policy and its outcomes

Abstract

Purpose – The purpose of this paper is to examine the effect of workfare programme participation on self-efficacy, because many studies suggest that sufficient self-efficacy is essential for successful job search in modern labour markets. Design/methodology/approach – The paper analyses an exemplary German workfare programme’ the so-called “One-Euro-Jobs” programme and examines whether participation in this programme improved the self-efficacy of participants. The analyses are based on survey data (Panel Study Labour Market and Social Security) that were combined with administrative records of the Statistics Department of the German Federal Employment Agency to obtain more reliable information on programme participation. To detect causal effects of participation, the authors apply propensity score matching. Findings – The findings show that participants’ self-efficacy, on average, was not improved by programme participation. Also, no well-determined positive effects of programme participation were found when controlling for the individual baseline level of self-efficacy. Practical implications – The findings suggest that workfare programme participation did not fulfil several of the psychological functions of work necessary to enhance participants’ self-efficacy. The authors suggest a two-step approach to enhancing individuals’ self-efficacy and their job-search abilities: in the first step, workfare participation aims to improve employability; in the second step, participants can learn the extent to which they have become ready to work in a regular subsidised job. Originality/value – Various studies examine the effect of workfare programme participation on employment prospects, well-being, health or social participation. Within the discourse on active labour market policy, this paper is the first to study the effect of workfare programme participation on self-efficacy.