Heyer, Gerd Koch, Susanne Stephan, Gesine Wolff, Joachim
Year of Publication:
[Journal:] Journal for Labour Market Research [ISSN:] 2510-5027 [Volume:] 45 [Year:] 2012 [Issue:] 1 [Pages:] 41-62
This article provides a result-oriented view on the current status of German active labor market policy evaluation. The literature shows that nearly all groups of instruments positively affect the labor market prospects of at least particular groups of participants. However, regarding the selection of program participants there is considerable room for improvement. Generally, assignment to private providers of placement services does not appear to be more effective than placement activities by the Federal Employment Agency. Only specific groups of unemployed benefit from such an assignment. Evaluation results are slightly more optimistic on placement vouchers. In contrast, wage subsidies, training within firms, and start-up subsidies improve the subsequent employment prospects of participants substantially. But for these latter instruments there is a substantial risk of deadweight loss, substitution and crowding-out effects. After an initial locking-in effect, vocational training and classroom training raise the employment rates of participants. According to the evaluation literature direct job creation schemes may improve the labor market prospects of hard-to-place individuals, but they can be quite harmful for the employment prospects other groups of unemployed.