In this chapter, we evaluate the employment effects of job-creation schemes (JCS) on the participating individuals in Germany. JCS are a major element of active labour market policy in Germany and are targeted at long-term unemployed and other hard-to-place individuals. Access to very informative administrative data of the Federal Employment Agency justifies the application of a matching estimator and allows us to account for individual (group-specific) and regional effect heterogeneity. We extend previous studies for Germany in four directions.

Job creation schemes (JCS) have been one important programme of active labour market policy (ALMP) in Germany for a long time. They aim at the re-integration of hard-to-place unemployed individuals into regular employment. A thorough microeconometric evaluation of these programmes was hindered by the fact, that available survey datasets have been too small to account for a possible occurrence of effect heterogeneity. However, identifying effect heterogeneity can help to improve the design and implementation of future programmes.

The differential performance of six Swedish active labour market programs for the unemployed is investigated in terms of short- and long-term employment probability and un-employment-benefit dependency. Both relative to one another and compared to more intense job search, the central finding is that the more similar to a regular job, the more effective a program is for its participants. Employment subsidies perform best by far, followed by trainee replacement and, by a long stretch, labour market training.

In this paper we show that firm characteristics have an influence on the success of employment subsidies e.g. wage subsidies and in-work benefits, as they can strengthen positive effects or mitigate negative effects. We consider firm characteristics as post treatment variables, which are realised after the (placement officer's or the unemployed job seeker's) decision regarding programme participation has taken place.

We provide new evidence on the effectiveness of West German labour market programmes by evaluating training and employment programmes that have been conducted 2000-2002 after the first large reform of German labour market policy in 1998. We employ exceptionally rich administrative data that allow us to use microeconometric matching methods and to estimate interesting effects for different types of programmes and participants at a rather disaggregated level. We find that, on average, all programmes fail to improve their participants' chances of finding regular, unsubsidised employment.

The study evaluates different ESF-funded labour market programmes by comparing the labour market status at different points in time after the treatment. In order to solve the selection problem we employ a standard matching algorithm. The effects of the analyzed programmes (wage subsidies, start-up subsidies and qualification measures for recipients of social welfare) are very heterogeneous. It can be observed that the direct integration into the regular labour market provides an advantage for the supported individuals.

We studied the effect of participation in a new business start-up scheme for needy unemployed people in Germany. The programme was introduced at the beginning of the year 2005 together with a new means-tested benefit system. The aim of the programme was to promote entrepreneurial activities among unemployed people. On the level of society such a programme aims at reducing unemployment, promoting entrepreneurship and potentially creating new work places.

Turning unemployment into self-employment has become a major focus of German active labour market policy (ALMP) in recent years. If effective, this would not only reduce Germany's persistently high unemployment rate, but also increase its notoriously low self-employment rate. Empirical evidence on the effectiveness of such programmes is scarce. We evaluate the effectiveness of two start-up programmes for the unemployed, where we include the probability of being employed, the probability of being unemployed and personal income as outcome variables.

Low female labor market participation is a problem many developed countries have to face. Beside activating inactive women, one possible solution is to support the re-integration of unemployed women. Due to female-specific labor market constraints (preferences for flexible working hours, discrimination), this is a difficult task, and the question arises whether active labor market policies (ALMP) are an appropriate tool to help.

Young labour-market entrants account for a high level of unemployment and short-term contracts. In July 2002, the French government moved to reduce this insecurity at the start of working life by introducing the Youth-in-business Contract (Contrat Jeune en Entreprise), a new contract for young people under 22 years old who dropped out of school before passing their final secondary school examinations. Under this scheme, firms were entitled to claim a subsidy when they hired an eligible young worker on an open-ended contract.