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Article
Publication date: 13 November 2009

Marco Caliendo

The purpose of the paper is to estimate the effectiveness of two start‐up programs (bridging allowance and start‐up subsidy) in East Germany.

Abstract

Purpose

The purpose of the paper is to estimate the effectiveness of two start‐up programs (bridging allowance and start‐up subsidy) in East Germany.

Design/methodology/approach

Using a combination of administrative data from the Federal Employment Agency and a follow‐up survey (for roughly 1,300/1,000 participants/non‐participants), the analysis is based on the conditional independence assumption. Kernel matching estimators are applied to estimate the treatment effects and test the sensitivity of the results using a conditional difference‐in‐differences approach.

Findings

At the end of the observation period both programs are effective: unemployment rates of participants are lower, and employment rates and personal income are higher when compared to non‐participants. Additionally, first descriptive evidence of the additional employment effects through direct job creation is presented, which is quite significant for the bridging allowance and negligible for participants in the start‐up subsidy.

Research limitations/implications

Participants in the start‐up subsidy are in their third year of participation at the end of the observation period and mostly still receive further support (although at a reduced rate). Therefore, the results for this program have to be treated as preliminary.

Practical implications

In contrast to other active labor market programs that have been evaluated recently (including job‐creation schemes and vocational training programs) this paper finds considerable positive effects for start‐up subsidies. Hence, programs aimed at turning the unemployed into entrepreneurs may be a promising strategy in East Germany.

Originality/value

This is one of the first studies that allows inferences to be drawn about the effectiveness of start‐up programs in East Germany. Most previous studies on the effectiveness of active labour market policies in the Eastern part of Germany neglected these programs.

Details

International Journal of Manpower, vol. 30 no. 7
Type: Research Article
ISSN: 0143-7720

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Article
Publication date: 18 October 2011

Annette Bergemann, Marco Caliendo, Gerard J. van den Berg and Klaus F. Zimmermann

Labor market programs may affect unemployed individuals' behavior before they enroll. The aim of this paper is to study whether such ex ante effects differ according to…

Abstract

Purpose

Labor market programs may affect unemployed individuals' behavior before they enroll. The aim of this paper is to study whether such ex ante effects differ according to ethnic origin.

Design/methodology/approach

The authors apply a method that relates self‐reported perceived treatment rates and job search behavioral outcomes, such as the reservation wage or search intensity, to each other. German native workers are compared with migrants with a Turkish origin or Central and Eastern European (including Russian) background. Job search theory is used to derive theoretical predictions. The ex ante effect of the German active labor market program (ALMP) system is examined using the novel IZA Evaluation Data Set which includes self‐reported assessments of the variables of interest as well as an unusually detailed amount of information on behavior, attitudes and past outcomes.

Findings

It is found that the ex ante threat effect on the reservation wage and search effort varies considerably among the groups considered.

Originality/value

The study is the first to investigate whether migrants and natives react similarly to the expectation of participating in an ALMP, and whether migrants of different regions of origin react similarly or not.

Details

International Journal of Manpower, vol. 32 no. 7
Type: Research Article
ISSN: 0143-7720

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Book part
Publication date: 21 February 2008

Marco Caliendo, Reinhard Hujer and Stephan L. Thomsen

In this chapter, we evaluate the employment effects of job-creation schemes (JCS) on the participating individuals in Germany. JCS are a major element of active labour…

Abstract

In this chapter, we evaluate the employment effects of job-creation schemes (JCS) on the participating individuals in Germany. JCS are a major element of active labour market policy in Germany and are targeted at long-term unemployed and other hard-to-place individuals. Access to very informative administrative data of the Federal Employment Agency justifies the application of a matching estimator and allows us to account for individual (group-specific) and regional effect heterogeneity. We extend previous studies for Germany in four directions. First, we are able to evaluate the effects on regular (unsubsidised) employment. Second, we observe the outcomes of participants and non-participants for nearly three years after the programme starts and can therefore analyse medium-term effects. Third, we test the sensitivity of the results with respect to various decisions that have to be made during implementation of the matching estimator. Finally, we check if a possible occurrence of a specific form of ‘unobserved heterogeneity’ distorts our interpretation. The overall results are rather discouraging, since the employment effects are negative or insignificant for most of the analysed groups. One exception are long-term unemployed individuals who benefit from participation at the end of our observation period. Hence, one policy implication is to address the programmes to this problem group more closely.

Details

Modelling and Evaluating Treatment Effects in Econometrics
Type: Book
ISBN: 978-0-7623-1380-8

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Article
Publication date: 18 October 2011

Marco Caliendo, Ricarda Schmidl and Arne Uhlendorff

This paper aims to analyze the role of social networks on the job search choices of the unemployed. If social networks convey useful information in the job search process…

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Abstract

Purpose

This paper aims to analyze the role of social networks on the job search choices of the unemployed. If social networks convey useful information in the job search process, individuals with larger networks should experience a higher productivity of informal search channels. This in turn affects the choice of formal search intensity and the reservation wage. The paper seeks to test these search‐theoretic implications of productive social networks empirically.

Design/methodology/approach

The authors use the IZA Evaluation Dataset containing detailed information on job search behavior of recently unemployed individuals. Observing a rich array of personality traits and direct measures of the social network, the authors choose an identification approach based on observable characteristics using least squares and binary probit regression analysis.

Findings

The findings confirm theoretical expectations. Individuals with larger networks use informal search channels more often and shift from formal to informal search. In addition to that, evidence is found for a positive relationship between network size and reservation wages.

Research limitations/implications

The extent to which networks are used during job search most likely also depends on the quality of the network, which cannot be observed in the data. However, as the network significantly changes the observable formal job search effort of individuals, public job search monitoring policies should take these effects into account.

Originality/value

The paper complements the previous body of literature on the role of social networks in the labor market that predominantly focuses on labor market outcomes. By highlighting the interaction between networks and job search choices the paper improves the understanding of realized labor market outcomes in the presence of networks.

Details

International Journal of Manpower, vol. 32 no. 7
Type: Research Article
ISSN: 0143-7720

Keywords

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Article
Publication date: 18 October 2011

Marco Caliendo, Armin Falk, Lutz C. Kaiser, Hilmar Schneider, Arne Uhlendorff, Gerard van den Berg and Klaus F. Zimmermann

This paper aims to present the IZA Evaluation Dataset, a newly created data source allowing for the evaluation of active labor market policies in Germany.

Abstract

Purpose

This paper aims to present the IZA Evaluation Dataset, a newly created data source allowing for the evaluation of active labor market policies in Germany.

Design/methodology/approach

The paper's approach is a description of the sampling and contents of the IZA Evaluation Dataset and an outline of its research potential.

Findings

The evaluation of active labor market policies is often confronted with a lack of adequate empirical data. The IZA Evaluation Dataset may serve as a role model for the provision of such data.

Research limitations/implications

The scope of active labor market policy instruments that can be analyzed with the IZA Evaluation Dataset is mainly restricted to measures for unemployed individuals.

Originality/value

In recent years, many countries have opened their administrative databases for evaluation studies. However, information that might be relevant for economic modeling is often absent. The IZA Evaluation Dataset aims to overcome such limitations for Germany by complementing administrative data from the Federal Employment Agency with innovative survey data.

Details

International Journal of Manpower, vol. 32 no. 7
Type: Research Article
ISSN: 0143-7720

Keywords

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Book part
Publication date: 23 November 2020

Robert W. Fairlie and Frank M. Fossen

A proposed explanation for why business creation is often found to increase in recessions is that there are two components to entrepreneurship – “opportunity” and…

Abstract

A proposed explanation for why business creation is often found to increase in recessions is that there are two components to entrepreneurship – “opportunity” and “necessity” – the latter of which is mostly counter-cyclical. Although there is some agreement on the conceptual distinction between these two factors driving entrepreneurship, there is little consensus in the literature on empirical definitions. The goal of this chapter is to propose an operational definition of opportunity versus necessity entrepreneurship based on the entrepreneur's prior work status (i.e., based on previous unemployment) that is straightforward, based on objective information, and empirically feasible using many large, nationally representative datasets. We then explore the validity of the definitions with theory and empirical evidence. Using datasets from the United States and Germany, we find that 80–90% of entrepreneurs are opportunity entrepreneurs. Applying our proposed definitions, we document that opportunity entrepreneurship is generally pro-cyclical and necessity entrepreneurship is strongly counter-cyclical both at the national levels and across local economic conditions. We also find that opportunity vs necessity entrepreneurship is associated with the creation of more growth-oriented businesses. The operational definitions of opportunity and necessity entrepreneurship proposed here may be useful for distinguishing between the two types of entrepreneurship in future research.

Details

Change at Home, in the Labor Market, and On the Job
Type: Book
ISBN: 978-1-83909-933-5

Keywords

Content available
Article
Publication date: 13 November 2009

Uwe Blien, Elke J. Jahn and Gesine Stephan

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Abstract

Details

International Journal of Manpower, vol. 30 no. 7
Type: Research Article
ISSN: 0143-7720

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Book part
Publication date: 21 February 2008

Abstract

Details

Modelling and Evaluating Treatment Effects in Econometrics
Type: Book
ISBN: 978-0-7623-1380-8

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Book part
Publication date: 21 February 2008

The estimation of the effects of treatments – endogenous variables representing everything from child participation in a pre-kindergarten program to adult participation in…

Abstract

The estimation of the effects of treatments – endogenous variables representing everything from child participation in a pre-kindergarten program to adult participation in a job-training program to national participation in a free trade agreement – has occupied much of the theoretical and applied econometric research literatures in recent years. This volume brings together a diverse collection of papers on this important topic by leaders in the field from around the world. This collection draws attention to several key facets of the recent evolution in this literature.

Details

Modelling and Evaluating Treatment Effects in Econometrics
Type: Book
ISBN: 978-0-7623-1380-8

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Book part
Publication date: 21 April 2010

Solomon W. Polachek and Konstantinos Tatsiramos

Early models of the functional distribution of income assume constant labor productivity among all individuals. Not until human capital theory developed did scholars take…

Abstract

Early models of the functional distribution of income assume constant labor productivity among all individuals. Not until human capital theory developed did scholars take into account how productivity varied across workers. According to early human capital models, this variation came about because each individual invested differently in education and training. Those acquiring greater amounts of schooling and on-the-job training earned more. However, these models neglected why one person would get training while another would not. One explanation is individual heterogeneity. Some individuals are smarter, some seek risk, some have time preferences for the future over the present, some simply are lucky by being in the right place at the right time, and some are motivated by the pay incentives of the jobs they are in. This volume contains 10 chapters, each dealing with an aspect of earnings. Of these, the first three deal directly with earnings distribution, the next four with job design and remuneration, the next two with discrimination, and the final chapter with wage rigidities in the labor market.

Details

Jobs, Training, and Worker Well-being
Type: Book
ISBN: 978-1-84950-766-0

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