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

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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.

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Author and article information

Contributors

Katrin Hohmeyer: +49 911 179 5170 , katrin.hohmeyer@iab.de

Joachim Wolff: +49 911 179 1248 , joachim.wolff@iab.de

Journal

Journal ID (nlm-ta): J Labour Mark Res

Journal ID (iso-abbrev): J Labour Mark Res

Title: Journal for Labour Market Research

Publisher: Springer Berlin Heidelberg (Berlin/Heidelberg )

ISSN (Print): 2510-5019

ISSN (Electronic): 2510-5027

Publication date (Electronic): 22 October 2018

Publication date PMC-release: 22 October 2018

Publication date (Print): 2018

Volume: 52

Issue: 1

Electronic Location Identifier: 11

Affiliations

Institute for Employment Research, Regensburger Straße 104, 90478 Nuremberg, Germany

Article

Publisher ID: 245

DOI: 10.1186/s12651-018-0245-9

PMC ID: 6208745

SO-VID: f2836db3-7036-4f98-9cb9-9760211a0895

License:

Open AccessThis article is distributed under the terms of the Creative Commons Attribution 4.0 International License ( http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license, and indicate if changes were made.