Should Welfare Administration be Centralized or Decentralized? Evidence from a Policy Experiment
Refereed Journal // 2015The 2005 reform of the German welfare system introduced two competing organizational models for welfare administration. In most districts, a centralized organization was established where local welfare agencies are bound to central directives. At the same time, 69 districts were allowed to opt for a decentralized organization. We evaluate the relative success of both types in terms of integrating welfare recipients into employment. Com-pared to centralized organization, decentralized organization has a negative effect on employment chances of males. For women, no significant effect is found. These findings are robust to aspects of internal organization common to both types of agencies.
Boockmann, Bernhard, Stephan Lothar Thomsen, Thomas Walter, Christian Göbel and Martin Huber (2015), Should Welfare Administration be Centralized or Decentralized? Evidence from a Policy Experiment, German Economic Review 16(1) , 13-42