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Of carrots and sticks: the effect of workfare announcements on the job search behaviour and reservation wage of welfare recipients

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  • Katrin Hohmeyer

    (Institute for Employment Research)

  • Joachim Wolff

    (Institute for Employment Research)

Abstract

The German workfare scheme ‘One-Euro-Jobs’, which provides additional jobs of public interest for welfare recipients, has a number of different goals. On the one hand, One-Euro-Jobs are intended to increase the participants’ employment prospects in the medium term. On the other hand, they can be used to test welfare recipients’ willingness to work. We use survey data from the Panel Study ‘Labour Market and Social Security’ and propensity score matching methods to study the intention-to-treat effect of receiving a One-Euro-Job announcement on job search behaviour, reservation wage and labour market performance of welfare recipients. We find that receiving a One-Euro-Job announcement increases job search activities significantly and decreases the reservation wage for women and individuals who have been employed within the last 4 years, but does not affect the short-term employment probability.

Suggested Citation

  • Katrin Hohmeyer & Joachim Wolff, 2018. "Of carrots and sticks: the effect of workfare announcements on the job search behaviour and reservation wage of welfare recipients," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 52(1), pages 1-23, December.
    • Handle: RePEc:spr:jlabrs:v:52:y:2018:i:1:d:10.1186_s12651-018-0245-9
    DOI: 10.1186/s12651-018-0245-9
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    Cited by:

    1. Gerard J. Van den Berg & Iris Kesternich & Gerrit Müller & Bettina Siflinger, 2019. "Reciprocity and the Interaction between the Unemployed and the Caseworker," CESifo Working Paper Series 7947, CESifo.
    2. Karl Gauffin, 2020. "Precariousness on the Swedish labour market: A theoretical and empirical account," The Economic and Labour Relations Review, , vol. 31(2), pages 279-298, June.
    3. Gerhard Krug & Katrin Drasch & Monika Jungbauer-Gans, 2019. "The social stigma of unemployment: consequences of stigma consciousness on job search attitudes, behaviour and success," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 53(1), pages 1-27, December.

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    More about this item

    Keywords

    Activation; Employment; Intention-to-treat effect; Job search; Threat effect; Attraction effect; Propensity score matching; Welfare receipt; Workfare;
    All these keywords.

    JEL classification:

    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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