Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/267451 
Year of Publication: 
2022
Series/Report no.: 
IZA Discussion Papers No. 15714
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
Our paper analyzes the role of public employment agencies in job matching, in particular the effects of the restructuring of the Federal Employment Agency in Germany (Hartz III labor market reform) for aggregate matching and unemployment. Based on two microeconomic datasets, we show that the market share of the Federal Employment Agency as job intermediary declined after the Hartz-reforms. We propose a macroeconomic model of the labor market with a private and a public search channel and fit the model to various dimensions of the data. We show that direct intermediation activities of the Federal Employment Agency did not contribute to the decline of unemployment in Germany. By contrast, improved activation of unemployed workers reduced unemployed by 0.8 percentage points. Through the lens of an aggregate matching function, more activation is associated with a larger matching efficiency.
Subjects: 
Hartz reforms
search and matching
reform of employment agency
JEL: 
E24
E00
E60
Document Type: 
Working Paper

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