East Germany
The Nasty Gap 30 years after unification: Why East Germany is still 20% poorer than the West Dossier In a nutshell The East German economic convergence process is hardly…
See page
Safety Net or Helping Hand? The Effect of Job Search Assistance and Compensation on Displaced Workers
Daniel Fackler, Jens Stegmaier, Richard Upward
IWH Discussion Papers,
No. 18,
2023
Abstract
We provide the first systematic evidence on the effectiveness of a contested policy in Germany to help displaced workers. So-called “transfer companies” (Transfergesellschaften) employ displaced workers for a fixed period, during which time workers are provided with job-search assistance and are paid a wage which is a substantial fraction of their pre-displacement wage. Using rich and accurate data on workers’ employment patterns before and after displacement, we compare the earnings and employment outcomes of displaced workers who entered transfer companies with those that did not. Workers can choose whether or not to accept a position in a transfer company, and therefore we use the availability of a transfer company at the establishment level as an IV in a model of one-sided compliance. Using an event study, we find that workers who enter a transfer company have significantly worse post-displacement outcomes, but we show that this is likely to be the result of negative selection: workers who lack good outside opportunities are more likely to choose to enter the transfer company. In contrast, ITT and IV estimates indicate that the use of a transfer company has a positive and significant effect on employment rates five years after job loss, but no significant effect on earnings. In addition, the transfer company provides significant additional compensation to displaced workers in the first 12 months after job loss.
Read article
Department Profiles
Research Profiles of the IWH Departments All doctoral students are allocated to one of the four research departments (Financial Markets – Laws, Regulations and Factor Markets –…
See page
LRF Research Profile
Research Profile of the Department of Laws, Regulations and Factor Markets The Department of Laws, Regulations and Factor Markets conducts research on the interaction of labour…
See page
Interviews
Quotations and Interviews It is not our style to abbreviate complex issues - but getting to the heart of the matter is. Below you will find quotes and interviews with IWH experts.…
See page
Wage and Employment Effects of Insolvencies
Wage and employment effects of bankruptcies Although the consequences of bankruptcies for affected employees are frequently debated in the public (e.g. due to the bankruptcy of…
See page
The Rise of Populist Parties in Europe
The Rise of Populist Parties in Europe: The Dark Side of Globalisation and Technological Change? Is the increasing strength of populist parties due to economic causes?…
See page
IWH-Tarif-Check
IWH-Tarif-Check The IWH-Tarif-Check (IWH Wage Rate Check) analyses the real income effects of recent wage agreements in Germany. It removes effects of inflation, taxation and…
See page
Projects
Our Projects 07.2022 ‐ 12.2026 Evaluation of the InvKG and the federal STARK programme On behalf of the Federal Ministry of Economics and Climate Protection, the IWH and the RWI…
See page
Population and labour market
Population and labour market Inhabitants are all people (Germans and foreigners) with permanent residence in federal territory (or in a Land). That does not include members of…
See page
