Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/90080 
Year of Publication: 
2013
Series/Report no.: 
IZA Discussion Papers No. 7659
Publisher: 
Institute for the Study of Labor (IZA), Bonn
Abstract: 
To which extent does an increase in operating effectiveness of public employment agencies on the one hand and a reduction of unemployment benefits on the other reduce unemployment? Using the recent labour market reform in Germany as background we find that the role of unemployment benefit reduction for the reduction of unemployment is very modest (7% of the observed decline). Enhanced effectiveness of public employment agencies, to the contrary, explains a substantial part (34%) of the observed post-reform unemployment decline. If disincentive effects of PEA reforms had been avoided, the effect could have increased to 51%.
Subjects: 
employment agencies
unemployment benefits
labour market reform
unemployment
structural model
JEL: 
E24
J65
J68
Document Type: 
Working Paper

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