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Do Lower Caseloads Improve the Effectiveness of Active Labor Market Policies? New Evidence from German Employment OfficesJens HainmuellerMassachusetts Institute of Technology (MIT) - Department of Political Science Barbara HofmannGovernment of the Federal Republic of Germany - Institute for Employment Research (IAB) Gerhard KrugInstitute for Employment Research (IAB); University of Erlangen-Nuremberg - Chair of Empirial Economic Sociology Katja WolfGovernment of the Federal Republic of Germany - Institute for Employment Research (IAB) September 13, 2011 MIT Political Science Department Research Paper No. 2011-22 Abstract: We study how the caseworker to client ratio affects the success of active labor market policies that aim to bring job-seekers into employment. Although existing evidence is limited, caseload is a potentially important policy parameter that affects both the quality and the administrative costs of employment services. Exploiting a unique pilot project by Germany's federal public employment agency that hired additional caseworkers in 14 of its 779 local employment offices, we find that lower caseloads resulted in a decrease in the rate and duration of local unemployment and a higher reemployment rate. Offices with lowered caseloads became more proactive and imposed more sanctions on clients with low search efforts and registered more new vacancies. Cost-benefit computations suggest that the costs from hiring additional caseworkers was offset by the savings from decreased benefit expenditures after a period of about ten months.
Number of Pages in PDF File: 35 Keywords: unemployment, job search, active labor market policy JEL Classification: C14, H43, H83, J68 working papers seriesDate posted: September 13, 2011 ; Last revised: October 17, 2011Suggested CitationContact Information
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