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The purpose of this paper is to analyse the implementation and effectiveness of an intensified activation scheme for very disadvantaged welfare recipients in Germany, used as a targeting device for a very generous wage subsidy (JobPerspective).

Using administrative data and a difference‐in‐difference approach, the authors analyse the implementation of the activation scheme and its impact on various labour market outcomes. To ensure that target and comparison group are comparable over time, the authors control for various individual, household and regional characteristics.

The activation of the target group of disadvantaged welfare recipients is modestly intensified directly after the scheme's introduction. This does not improve the prospects of the target group to work in regular jobs, but – as a first step – in subsidized jobs. Considering a later period, evidence was found for broader activation efforts together with some gains in the regular employment for disadvantaged welfare recipients. Overall, the results suggest that the implementation of activation for disadvantaged welfare recipients, as well as employment gains, need time.

This study analyses whether and how a scheme of intensified activation that leaves its design to local actors, without providing additional funding, makes job centres implement such a policy.