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Under heavy pressure : intense monitoring and accumulation of sanctions for young welfare recipients in Germany

Author

Listed:
  • Berg, Gerard J. van den
  • Uhlendorff, Arne

    (Institute for Employment Research (IAB), Nuremberg, Germany ; CNRS ; CREST ; DIW Berlin ; IZA)

  • Wolff, Joachim

    (Institute for Employment Research (IAB), Nuremberg, Germany ; Labor and Socio-Economic Research Center Nuremberg)

Abstract

"With the introduction of a new welfare benefit system in 2005, Germany implemented quite strict benefit sanctions for welfare recipients aged younger than 25 years. For all types of non-compliance except for missing appointments, their basic cash benefit is withdrawn for three months. A second sanction of the same type within one year implies a complete benefit cut for three months. We analyze the impact of these sanctions on job search outcomes and on transitions out of the labor force. Our analysis is based on administrative data on a large inflow sample of young male jobseekers into welfare in West Germany. We estimate separate models for people living alone and people living with their family, as sanctioned welfare recipients living with other household members can partly rely on their support and might react less by increasing search intensity and lowering reservation wages. We estimate the parameters of multivariate duration models taking selection based on unobservables into account. Our results suggest that both the first and the second sanction increase the probability of finding a job, but that these jobs go along with lower earnings due to first but not the second sanction. Moreover, first sanctions significantly increase the transition rate out of the labor force of both groups of young men, while second sanctions amplify this effect only for young men living in single households." (Author's abstract, IAB-Doku) ((en))

Suggested Citation

  • Berg, Gerard J. van den & Uhlendorff, Arne & Wolff, Joachim, 2015. "Under heavy pressure : intense monitoring and accumulation of sanctions for young welfare recipients in Germany," IAB-Discussion Paper 201534, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    • Handle: RePEc:iab:iabdpa:201534
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    References listed on IDEAS

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    Cited by:

    1. Philip Jung & Anke Hassel & Robert Habeck & Matthias Knuth & Alexander Spermann & Hans Peter Grüner & Maximilian Joseph Blömer & Clemens Fuest & Andreas Peichl, 2019. "Reformvorschläge für den Arbeitsmarkt: Ist Hartz IV noch zukunftsfähig?," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 72(06), pages 03-25, March.
    2. Möller, Joachim, 2016. "Lohnungleichheit: Gibt es eine Trendwende? (German wage inequality: Is there a trend reversal?)," IAB-Discussion Paper 201609, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    3. Marco Caliendo & Ricarda Schmidl, 2016. "Youth unemployment and active labor market policies in Europe," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-30, December.
    4. Hohenleitner, Ingrid & Hillmann, Katja, 2019. "Impact of welfare sanctions on employment and benefit receipt: Considering top-up benefits and indirect sanctions," HWWI Research Papers 189, Hamburg Institute of International Economics (HWWI).
    5. Feld, Lars P. & Schmidt, Christoph M. & Schnabel, Isabel & Truger, Achim & Wieland, Volker, 2019. "Den Strukturwandel meistern. Jahresgutachten 2019/20 [Dealing with Structural Change. Annual Report 2019/20]," Annual Economic Reports / Jahresgutachten, German Council of Economic Experts / Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung, volume 127, number 201920.
    6. Hohenleitner, Ingrid & Hillmann, Katja, 2019. "Impact of welfare sanctions on the quality of subsequent employment: Wages, incomes, and employment stability," HWWI Research Papers 190, Hamburg Institute of International Economics (HWWI).
    7. Morescalchi Andrea & Paruolo Paolo, 2020. "Too Much Stick for the Carrot? Job Search Requirements and Search Behaviour of Unemployment Benefit Claimants," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 20(1), pages 1-21, January.

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    More about this item

    Keywords

    Bundesrepublik Deutschland ; Westdeutschland ; Auswirkungen ; Bedarfsgemeinschaft ; berufliche Integration ; Einkommenseffekte ; Einkommenserwartung ; IAB-Leistungsempfängerhistorik ; Integrierte Erwerbsbiografien ; junge Erwachsene ; allein Stehende ; Nichterwerbstätigkeit ; Sanktion ; Sperrzeit ; arbeitslose Männer ; Arbeitslosengeld II-Empfänger ; Arbeitsuche ; 2007-2009;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings

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