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

Lena Jacobi and Jochen Kluve

No 41, RWI Discussion Papers from RWI - Leibniz-Institut für Wirtschaftsforschung

Abstract: 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 start-up subsidies show significantly positive effects.On balance, therefore, the reform seems to be moving the German labour market in the right direction.

Keywords: Active labour market policy; labour market reform; programme evaluation; Hartz laws (search for similar items in EconPapers)
JEL-codes: J0 J68 J88 (search for similar items in EconPapers)
Date: 2006
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Citations: View citations in EconPapers (100)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:rwidps:41

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