Imposed Benefit Sanctions and the Unemployment-to-Employment Transition: The German Experience

32 Pages Posted: 3 Nov 2008

See all articles by Kai-Uwe Müller

Kai-Uwe Müller

German Institute for Economic Research (DIW Berlin)

Viktor Steiner

Zentrum Fuer Europaeische Wirtschaftsforschung (ZEW) - Center for European Economic Research; IZA Institute of Labor Economics

Multiple version iconThere are 2 versions of this paper

Abstract

We analyze the effect of imposed benefit sanctions on the unemployment-to-employment transition of unemployed people entitled to unemployment compensation on the basis of register data from the German Federal Employment Agency. We combine propensity score matching with a discrete-time hazard rate model which accounts for the dynamic nature of the treatment. We find positive short- and long-term effects of benefit sanctions which are robust for men and women in East and West Germany. The effects diminish with the elapsed unemployment duration until a sanction is imposed. The limited use of benefit sanctions can thus be an effective activation tool if they take place not too late in an individual's unemployment spell.

Keywords: benefit sanctions, unemployment transitions, German labor market reform, ex-post evaluation, propensity score matching, hazard rate model, unobserved heterogeneity

JEL Classification: J64, J65, H31

Suggested Citation

Müller, Kai-Uwe and Steiner, Viktor, Imposed Benefit Sanctions and the Unemployment-to-Employment Transition: The German Experience. IZA Discussion Paper No. 3483. Available at SSRN: https://ssrn.com/abstract=1294556 or http://dx.doi.org/10.1111/j.0042-7092.2007.00700.x

Kai-Uwe Müller (Contact Author)

German Institute for Economic Research (DIW Berlin) ( email )

Mohrenstraße 58
Berlin, 10117
Germany

Viktor Steiner

Zentrum Fuer Europaeische Wirtschaftsforschung (ZEW) - Center for European Economic Research ( email )

P.O. Box 10 34 43
L 7,1 D-68161 Mannheim
Germany

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
46
Abstract Views
735
PlumX Metrics