Hartz Reforms Research Articles

Vouchers and Caseworkers in Public Training Programs: Evidence from the Hartz Reform in Germany

This paper studies the role of training vouchers and caseworkers in public training programs. Using a rich administrative data set, we apply matching and regression methods to measure the effect of the Hartz reform in Germany, which introduced training vouchers and imposed more selective criteria on participants. Besides estimating the overall reform effect, we isolate the effect induced by changes in the composition of program participants due to stricter selection by the caseworkers (selection effect) from the effect based on the introduction of vouchers (voucher effect). Analyzing the most important type of training in Germany, we find a slightly positive impact of the reform. Our decomposition results suggest that the selection effect is ? if at all ? slightly negative, and that the voucher effect increased both, the employment probability and earnings of the participants.

The Evaluation of Welfare State Performance: Modelling a Counterfactual World

Was w?re gewesen, wenn...? Evaluation sozialstaatlicher Ma? nahmen mithilfe kontrafaktischer Modelle?. The evaluation of welfare state performance is an important issue in times of tight government budgets, high unemployment and growing inequality. Policymakers and taxpayers want to know if a specific programme has led to the intended effect, and with no ex cessive waste of resources. For such evaluations to be thorough and robust, ap propriate methods and the right counterfactuals are important. It is difficult to say what would have happened if a certain policy had not been implemented or implemented differently. This holds even more for the impact on a single indi vidual than for aggregate results. This article will highlight some examples and possibilities of how to deal with counterfactual questions in the context of the Hartz reforms, probably the most far-reaching welfare state and labour market changes in the history of the Federal Republic of Germany. Furthermore this reform was the first big attempt of systematic welfare state evaluation in Ger many.

Employment Regulation and Labor Market Policy in Germany, 1991-2005

The paper provides an overview of institutional provisions and reforms regarding employment protection, active and passive labor market policies in Germany as well as of actors' responsibilities in these areas. It covers the period between the early 1990s and the most recent Hartz reforms. Empirical data on labor market outcomes with respect to the levels and structures of both employment and unemployment complements this study.

Before and after the Hartz Reforms: The Performance of Active Labour Market Policy in Germany

Having faced high unemployment rates for more than a decade, the German government implemented a comprehensive set of labour market reforms during the period 2003-2005. This paper describes the economic and institutional context of the German labour market before and after these so-called Hartz reforms. Focussing on active policy measures, we delineate the rationale for reform and its main principles. As results of programme evaluation studies post-reform have become available just now, we give a first assessment of the effectiveness of key elements of German ALMP before and after the Hartz reforms. The evidence indicates that the re-organisation of public employment services was mainly successful, with the exception of the outsourcing of services. Re-designing training programmes seems to have improved their effectiveness, while job creation schemes continue to be detrimental for participants' employment prospects. Wage subsidies and startup subsidies show significantly positive effects. On balance, therefore, the reform seems to be moving the German labour market in the right direction.

‘New politics’ in German labour market policy? The implications of the recent Hartz reforms for the German welfare state

The twin predicaments of German labour market performance and welfare state performance triggered an ongoing debate on reforming the German model. Recently, this debate has yielded an outcome in the form of the so-called Hartz laws, a bundle of labour market policies aimed at the reduction of unemployment and the decrease of non-wage labour costs. The Hartz reforms have played a prominent role in the public discussion, but are they really a watershed as both optimists and pessimists claim? In this article we investigate in what sense the Hartz reforms mark a substantive political change and how they are related to similar processes in other countries. To characterise the policy output we discuss three views of policy reform: reform as a process of policy-learning, reform as a process of competitive realignment and reform as a process of reinforcing path dependence. We show which of the three paradigms accounts for which part of the political result. We find evidence for both policy diffusion and retrenchment, but it is too early to speak of a change of regime. Rather, both the changes thus far and the blocked proposals follow a traditional German logic of strong institutional resistance.

Did the Hartz Reforms Speed-Up Job Creation? A Macro-Evaluation Using Empirical Matching Functions

Did the Hartz Reforms Speed-Up Job Creation? A Macro-Evaluation Using Empirical Matching Functions

Reforming the German Labour Market: The Case of Temporary Agency Work

Germany is known as one of the countries where the collective representation of interests through associations (‘corporatism’) is particularly strong. However, after the tripartite Alliance for Jobs, Training and Competitiveness failed to agree on solutions for combating high unemployment, an independent commission established by the government (the ‘Hartz commission’) has currently set the agenda for labour market reform. This article addresses the question of whether these events signal the end of corporatism in labour market policy in Germany. An analysis of temporary agency work, an atypical form of employment addressed by the Hartz reforms, shows that fundamental reform in Germany must be initiated outside the system of tripartite interest negotiation. However, the implementation of such reforms depends on the traditional structures of interest negotiation between the social partners.

A Conceptual Framework for the Evaluation of Comprehensive Labor Market Policy Reforms in Germany

Over the last year the German government has introduced a comprehensive set of labor market policy reforms, the so-called Hartz reforms, which aim at a significant reduction of unemployment. To this end, (a) many of the existing instruments of active labor market policy are modified considerably, (b) a set of new instruments is introduced, and (c) the administrative framework in which these measures operate is changed substantially. In order to be able to judge the success of these measures by the end of the current legislative period in mid-2006, the government has asked academic experts to set up an evaluation concept capable of generating reliable empirical evidence by that date. The task is therefore to develop a ready-to-implement concept for the evaluation of the full set of reforms in their entirety, as well as each instrument on its own, facing substantive constraints regarding data availability and a short time horizon. This paper presents such a concept.We discuss essential guidelines for an ideal evaluation design, conceptual and practical difficulties that arise in the context of evaluating the Hartz reforms, and ways to overcome these obstacles. After detailing the three main analytical steps ? analyses of effectiveness, efficiency, and implementation and process analysis ? we present the concrete evaluation design, specific methods applicable to particular instruments,and a sampling scheme for collecting the required data. In addition to the fact that our concept is directly implementable, it also has the advantage of being extensible for future evaluations.