Authors	Hujer, R., Blien, U., Caliendo, M. and Zeiss, C.
Year	2006
Reference	In: Carloeo, F.E., Destefanis, S. (Eds.): The European Labour Market. Regional Dimensions, Physica Verlag, pp. 287-310.
Keywords	Evaluation, Active Labour Market Policy, Dynamic Panel Data Model, Matching, Beveridge Curve
JEL-Classification	C33, E24, H43, J64, J68
Presentations	EALE conference - Paris 2002, Verein für Socialpolitik - Innsbruck 2002, 42nd congress of ERSA - Dortmund 2002, 5th IZA European Summer School - Buch 2002.
Download	Revised version from June 2004: PDF IZA Discussion Paper No. 616: PDF
Abstract	Most evaluation studies of active labour market policies (ALMP) focus on the microeconometric evaluation approach using individual data. However, as the microeconometric approach usually ignores impacts on the non-participants, it should be seen as a first step to a complete evaluation, which has to be followed by an analysis on the macroeconomic level. To do so we discuss a theoretical labour market framework augmented by ALMP that enables us to find relevant channels how ALMP might influence the whole economy. This framework serves as a starting point for the following empirical analysis, where we use regional data of 175 German labour office districts and a dynamic panel estimator to evaluate the impacts of ALMP in Germany in the time period 1998-2000. Our analysis accounts especially for the inherent simultaneity problem of ALMP and dynamics on the labour market. Separate estimations for West and East Germany show considerable differences in the effects of ALMP in both regions. Whereas in West Germany vocational training and job creation schemes have positive effects on the labour market situation, the results in East Germany are at best insignificant.