The threat effect of participation in active labor market programs on job search behavior of migrants in Germany

Abstract

PurposeLabor market programs may affect unemployed individuals' behavior before they enroll. The aim of this paper is to study whether such ex ante effects differ according to ethnic origin.Design/methodology/approachThe authors apply a method that relates self‐reported perceived treatment rates and job search behavioral outcomes, such as the reservation wage or search intensity, to each other. German native workers are compared with migrants with a Turkish origin or Central and Eastern European (including Russian) background. Job search theory is used to derive theoretical predictions. The ex ante effect of the German active labor market program (ALMP) system is examined using the novel IZA Evaluation Data Set which includes self‐reported assessments of the variables of interest as well as an unusually detailed amount of information on behavior, attitudes and past outcomes.FindingsIt is found that the ex ante threat effect on the reservation wage and search effort varies considerably among the groups considered.Originality/valueThe study is the first to investigate whether migrants and natives react similarly to the expectation of participating in an ALMP, and whether migrants of different regions of origin react similarly or not.