Impact and Process Evaluations in Selected European Countries
Labour Markets and Employment Policy series
Edited by Jaap de Koning and Hugh Mosley
Chapter 4: Does active labout market policy matter? An aggregate impact analysis for Germany
4. Does active labour market policy matter? An aggregate impact analysis for Germany Günther Schmid, Stefan Speckesser and Christoph Hilbert1 INTRODUCTION This chapter investigates the impact of German active labour market policy (ALMP) on long-term unemployment. Extended periods of unemployment frequently lead to social exclusion. We are therefore interested in ﬁnding out whether ALMP can prevent social exclusion and contribute to social integration. Our empirical analysis is based on two methodological approaches: a structural equation model and a matching model based on the aggregate impact analysis (AIA) model outlined in Bellmann and Jackman (1996a). It uses regional employment ofﬁces (REO) in Germany as units of observation. The effect of ALMP is measured on aggregate indicators such as the level, structure or change in long-term unemployment and the outﬂow rate of unemployment in the regions. REO are the operative units of the German federal employment ofﬁce (FEO) in Nuremberg, which is responsible for administering unemployment insurance and ALMP. Despite central regulation, REO have considerable discretion both in choosing the mix of policies (‘portfolio’) as well as in implementing them. Our objective is to operationalize these variations and to test whether they matter in the ﬁght against long-term unemployment. We are seeking the ‘intelligent portfolio’ or policy mix of ALMP for regional labour markets. A further advantage of AIA compared with individual impact analysis is that to some extent (at least indirectly) it captures displacement, substitution, deadweight and multiplier effects. We will begin with a brief report on...
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