This study investigates firm survival and employment growth of start-ups by unemployed people in East and West Germany as promoted by the Work Support Act (so called bridging allowances). In 1994, the services provided were improved considerably, which led to a sharp increase in the number of start-ups by the unemployed. The empirical analysis is based on a sample of newly founded firms from th...

What Did All the Money Do? On the General Ineffectiveness of Recent West German Labour Market Programmes We provide new evidence on the effectiveness of West German labour market programmes by evaluating training and employment programmes that have been conducted 2000-2002 after the first large reform of German labour market policy in 1998. We employ exceptionally rich administrative data that ...

As a response to an overall high and persistent unemployment rate during the 1990s and the beginning of the new millennium, the German Federal Employment Agency underwent several reforms. One of the most important reforms, the reform of the organisational structure of the Federal Employment Agency, comprised an adjustment of the business model and a reorganisation of placement processes. From 2...

The prevailing labor market models assume that minimum wages do not affect the labor supply schedule. We challenge this view in this paper by showing experimentally that minimum wages have significant and lasting effects on subjects’ reservation wages. The temporary introduction of a minimum wage leads to a rise in subjects’ reservation wages which persists even after the minimum wage has been ...

Introducing Unemployment Insurance to Developing Countries The paper identifies key labor market and institutional differences between developed and developing countries, analyzes how these differences affect the working of the standard, OECD-style unemployment insurance (UI) program, and derives a desirable design of unemployment benefit program in developing countries. It argues that these co...

To reduce equilibrium unemployment targeted hiring subsidies and profiling techniques for long-term unemployed are often recommended. To analyze the effects of these two instruments, our model combines two search methods: the public employment service and random search, jobseekers choose between an active and a passive search strategy, while labour market policy has two options available. First...

Youth Unemployment in Belgium: Diagnosis and Key Remedies In Belgium youth unemployment is structurally higher than the European (EU27) average, in particular for the low educated. In this study we set a diagnosis of the main structural factors and advance key remedies. We analyze the system of employment protection, education and passive and active labor market policies. A high minimum wage, a...

Labour Market Signalling and Unemployment Duration: An Empirical Analysis Using Employer-Employee Data This paper tests the signalling hypothesis using detailed flow-based employer-employee data from Denmark. The primary focus is to explore how the conditions in the pre-displacement firm affect the duration of unemployment. The empirical analysis is conducted within a competing risk framework, ...