A fistful of euros: Is the German one‐euro job workfare scheme effective for participants?

Abstract

Hohmeyer K, Wolff J. A fistful of euros: is the German one‐euro job workfare scheme effective for participants? Welfare reforms have constituted a major policy issue in many OECD countries in recent decades. In Germany, a major reform in 2005 emphasised the activation of welfare recipients and introduced a workfare programme –‘One‐Euro Jobs’– on a large scale. In the present study, the impact of one‐euro jobs on the employment prospects of different groups of participants was estimated. The analysis was conducted on a large sample of welfare recipients using propensity score matching. The sample of one‐euro job participants and other welfare recipients was drawn from administrative records comprising all those who started their participation in the programme in early 2005. Our results showed that participation slightly improved the medium‐term employment prospects for women but not for men. Participation reduced the employment rate of participants younger than 25 years but raised it for some of the older participant groups. In conclusion, one‐euro jobs are effective for participants who have been jobless for several years but ineffective for participants who were recently employed.

Who is Targeted by One-Euro-Jobs? A Selectivity Analysis

“…Thus, the decision of which individuals are selected into the programme may also influence the effectiveness of public employment that is investigated by micro econometric studies (Hohmeyer / Wolff 2007). For such programme evaluation studies it is important to generate knowledge about the processes and mechanisms of placement into One-Euro-Jobs and the programme operation to apply a suitable evaluation strategy.…”

The subjective well-being of workfare participants: insights from a day reconstruction survey

“…It is commonly observed that workfare participation causes a lock-in effect, i.e. that, while participating in the program, the transition rates into employment are substantially lower for program participants than for nonparticipating unemployed persons (Huber et al 2011, Hohmeyer andWolff 2012). The motivation effect may be offset by a lack of time for the job search although workfare programs typically demand and encourage participants to search for regular jobs, allow them to take time off to go to job interviews, etc.…”

Nueve años de hartz iv: evaluación de una reforma del bienestar

“…And this brings us to the question of the 'effectiveness' of activation schemes in terms of the so-called net treatment effect on the treated in the econometric sense. Subsidized labour in short term arrangements (One-Euro-Jobs) seems to have slightly positive effects on women in western Germany, on elder persons and for most participants in the long term (at least two years after the end of the scheme) (Wolff and Hohmeyer 2012), which is better than the foregoing long-term arrangements of subsidized job creation schemes which had been introduced in 1969 and had been blamed for keeping participants away from search activities (Caliendo and Hujer 2006). But this positive labour market outcome is not very strong, as it is partly counterbalanced by creaming effects and false targeting (Wolff and Stephan 2013).…”