Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/270313 
Year of Publication: 
2023
Series/Report no.: 
SOEPpapers on Multidisciplinary Panel Data Research No. 1185
Publisher: 
Deutsches Institut für Wirtschaftsforschung (DIW), Berlin
Abstract: 
Our paper analyzes the role of public employment agencies in job matching, in particular the effects of the restructuring of the Federal Employment Agency in Germany (Hartz III labor market reform) for aggregate matching and unemployment. Based on two microeconomic datasets, we show that the market share of the Federal Employment Agency as job intermediary declined after the Hartz reforms. We propose a macroeconomic model of the labor market with a private and a public search channel and fit the model to various dimensions of the data. We show that direct intermediation activities of the Federal Employment Agency did not contribute to the decline in unemployment in Germany. By contrast, improved activation of unemployed workers reduced unemployed by 0.8 percentage points. Through the lens of an aggregate matching function, more activation is associated with a larger matching efficiency.
Subjects: 
Hartz reforms
search and matching
reform of employment agency
JEL: 
E24
E00
E60
Document Type: 
Working Paper

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