DP6246 | And Then There Were Four... How Many (and Which) Measures of Active Labour Market Policy Do We Still Need?

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Through the Hartz reforms, German active labour market policy was fundamentally restructured and has since been systematically evaluated. This paper reviews the recent evaluation findings and draws some conclusions for the future setup of active labour market policies in Germany. It argues in favour of a reduced range of active labour market policy schemes focusing on programs with proven positive effects (that are wage subsidies, training, start-up grants and placement vouchers) and calls for a systematic evaluation of all instruments not scrutinized so far.