New Evidence on the Effects of Job Creation Schemes in Germany - a Matching Approach with Threefold Heterogeneity

Abstract

This paper evaluates the effects of job creation schemes on the participating individuals inGermany. Since previous empirical studies of these measures have been based on relativelysmall datasets and focussed on East Germany, this is the first study which allows to drawpolicy-relevant conclusions. The very informative and exhaustive dataset at hand not onlyjustifies the application of a matching estimator but also allows to take account of threefoldheterogeneity. The recently developed multiple treatment framework is used to evaluate theeffects with respect to regional, individual and programme heterogeneity. The results showconsiderable differences with respect to these sources of heterogeneity, but the overallfinding is very clear. At the end of our observation period, that is two years after the start ofthe programmes, participants in job creation schemes have a significantly lower successprobability on the labour market in comparison to matched non-participants.

Keywords: job creation schemes, multiple treatment, heterogeneity, matching, evaluation

JEL Classification: H43, J64, J68, C13, C40