Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/245680 
Year of Publication: 
2021
Series/Report no.: 
IZA Discussion Papers No. 14629
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
In this paper we report the results of an empirical study on the employment growth effects of a policy intervention, explicitly aimed at increasing placement efficiency of the Federal Employment Agency in Germany. We use the Hartz III reform in the year 2004 as an exogenous intervention that improves the matching process and compare establishments that use the services of the Federal Employment Agency with establishments that do not use the placement services. Using detailed German establishment level data, our difference-in-differences estimates reveal an increase in employment growth among those firms that use the agency for their recruitment activities compared to non-user firms. After the Hartz III reform was in place, establishments using the agency grew roughly two percentage points faster in terms of employment relative to non-users and those establishments achieve an increase in the proportion of hires. We provide several robustness tests using, for example, inverse-probability weighting to additionally account for differences in observable characteristics. Our paper highlights the importance of the placement service on the labor demand side, in particular on the so far overlooked establishment level.
Subjects: 
Hartz III reform
Federal Employment Agency
matching efficiency
employment growth
difference-in-differences
JEL: 
J23
J64
J68
Document Type: 
Working Paper

Files in This Item:
File
Size
499.37 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.