Government Measure Improves Quality of Life for the Long-Term Unemployed
Research
03.12.2019
Are Employment Programmes Beneficial to the Long-Term Unemployed?
The federal programme “Soziale Teilhabe am Arbeitsmarkt” (“Social Inclusion in the Labour Market”) has significantly improved the well-being and social integration of long-term unemployed persons in Germany taking part in this programme. Particularly those who had been unemployed for a very long time and suffered from health problems benefited the most. The programme’s most prominent effects were seen in the participants’ subjective life satisfaction.
These are the results of a study conducted by ZEW Mannheim, which analysed the effects of the programme during the time period of 2015 to 2019. ZEW is part of a research consortium commissioned by the Federal Ministry of Labour and Social Affairs (BMAS) to evaluate the programme and conduct quantitative impact analyses.
Declared objectives of the employment programme initiated by the BMAS were to improve social integration by employing the programme participants, as well as increasing their placement opportunities. The employment programme ran from 2015 to 2018 as a pilot project of the BMAS and offered subsidised employment for 20,000 participants for up to three years. Measuring with the four indicators of social belonging, social status, general life satisfaction and mental health, ZEW researchers examined whether the programme increased social integration. In the past, the research consortium had already published evaluation reports of the federal programme on behalf of the BMAS.
“Our results show that social integration was significantly improved by the federal programme, albeit to varying degrees for the different indicators,” says Dr. Laura Pohlan, co-author of the study and researcher in the ZEW Research Department “Labour Markets and Human Resources”. Accordingly, the general life satisfaction of the participants increased the most during the programme, while the positive effect on perceived social status was lowest.
Employment strengthens the sense of belonging
In order to participate in the federal programme, job centres had to apply for funding by entering an ideas competition. The regions where the programme was most frequently used were mainly areas with weak economic conditions and a high number of long-term unemployed. On average, the programme participants were 49 years old and had been registered as unemployed for 7.4 years. In their subsidised job position, they worked on average 28 hours a week at minimum wage. About half of them suffered from health problems and about a quarter of the participants lived in households with young children. Although part of the additional income was deducted from their welfare entitlements, the participants received an average additional income of 3,350 euros per year as a result of their work in the programme.
“Having a job is not only a financial improvement, it also strengthens the feeling of being part of society and being able to perform a useful task in this society,” explains PD Dr. Friedhelm Pfeiffer, acting head of the ZEW Research Department “Labour Markets and Human Resources” and co-author of the study.
The federal programme also strengthened the social integration of the participants by means of certain measures offered by the job centres, such as personal counselling, further training and qualification, as well as activities with other participants. “According to our findings, persons who have been dependent on welfare benefits for a very long time and had to struggle with health problems benefited most from the programme,” says Boris Ivanov, a researcher in the ZEW Research Department “Labour Markets and Human Resources” and also a co-author of the study.
Effectiveness of comparable programmes can be increased
Finally, the ZEW study shows that the positive effects diminished over the course of the programme. This was not because the participants benefited less from the programme over time, but rather because the control group, which was formed for the study, had caught up. Even without participation, an increasing proportion of control persons found a job during the programme period, so that their indicator values for well-being and social integration reached similar levels to those of the programme participants.“ These results indicate that the effectiveness of comparable employment programmes can be increased if participation is concentrated even more strongly on those long-term unemployed persons unable to find employment on their own,” says Friedhelm Pfeiffer.
For the study, the ZEW researchers made use of data from the Integrated Employment Biographies of the Institute for Employment Research (IAB) in Nuremberg with individual-level information on employment positions subject to social security contributions, periods of unemployment, job search, social assistance claims, and participation in other public labour market programmes. These data were combined with administrative data from the Federal Employment Agency on the local labour market situation, and with a telephone survey of participants and control persons.
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Dr. Laura Pohlan
