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The paper aims to present an analysis of the indirect and direct effects of active labour market policy measures at the regional level for Western Germany.

Most evaluation studies of active labour market policy focus on the microeconometric treatment effect using individual data and do not account for possible indirect effects like deadweight and substitution effects. The present study uses a dynamic specification of the augmented matching function at the regional level. A dynamic panel data model is estimated using monthly and regional variation of different labour market programmes as explanatory variables. Furthermore, spatial interactions are taken into account by adding a spatially correlated error term.

Almost no significant negative effects are found of the stock of participants in programmes of labour market policy on the number of outflows from unemployment into regular jobs. Thus, contrary to findings at the individual level, no lock‐in effect is found. The number of programme participants does not reduce the number of outflows from unemployment. On the other hand when looking not at the stocks but on the outflows from programmes, no positive effects on outflows from unemployment at the regional level are found.

Because of data limitations only a period up to six months after completing a programme is used.

The authors distinguish between the effects of the stock of programme participants and of the outflows from programmes. Furthermore, the authors account for spatially correlated error terms by using a GM estimator proposed by Mutl in 2006.

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.

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.

Various types of short training programmes exist in Germany. This article aims to evaluate short training courses for welfare recipients and to detect which programme type works best with respect to different outcome indicators.

The author measures the impact of six short training programmes on the participants. She uses propensity score matching and large‐scale administrative data to find suitable comparison groups. She compares treatment to non‐participation as well as participation in different training types directly.

The results demonstrate that in‐firm training has large positive effects on individual employment prospects and stability. Furthermore, classroom skill training is more effective than other classroom types while application training is rather ineffective. Treating some of the application training participants with an alternative sub‐programme would improve the effectiveness.

The results show which training types work best. However, the results do not imply macro or cost‐benefit effects.

Several of the short training courses, mostly occupation‐specific sub‐programmes, are short and relatively inexpensive options to activate welfare recipients.

The paper analyses the effects of six short training programmes for welfare recipients that have not been analysed before. The sensitivity of the results is examined using a wide range of estimators and different outcomes.