Do German Welfare-to-work Programmes Reduce Welfare And Increase Work?

Many Western economies have reformed their welfare systems with the aim of activating welfare recipients by increasing welfare-to-work programmes and job search enforcement. The authors evaluate the three most important German welfare-to-work programmes implemented after a major reform in January 2005 ("Hartz IV"). Their analysis is based on a unique combination of large scale survey and administrative data that is unusually rich with respect to individual, household, agency level, and regional information. They use this richness to allow for a selection-on-observables approach when doing the econometric evaluation.