A fistful of euros: Is the German one-euro job workfare scheme effective for participants?

Hohmeyer K, Wolff J. A fistful of euros: is the German one-euro job workfare scheme effective for participants?

Welfare reforms have constituted a major policy issue in many OECD countries in recent decades. In Germany, a major reform in 2005 emphasised the activation of welfare recipients and introduced a workfare programme –‘One-Euro Jobs’– on a large scale. In the present study, the impact of one-euro jobs on the employment prospects of different groups of participants was estimated. The analysis was conducted on a large sample of welfare recipients using propensity score matching. The sample of one-euro job participants and other welfare recipients was drawn from administrative records comprising all those who started their participation in the programme in early 2005. Our results showed that participation slightly improved the medium-term employment prospects for women but not for men. Participation reduced the employment rate of participants younger than 25 years but raised it for some of the older participant groups. In conclusion, one-euro jobs are effective for participants who have been jobless for several years but ineffective for participants who were recently employed.