Do German Welfare‐to‐Work Programmes Reduce Welfare Dependency and Increase Employment?

Abstract. During the last decade, many Western economies reformed their welfare systems with the aim of activating welfare recipients by increasing welfare‐to‐work programmes (WTWP) and job‐search enforcement. We evaluate the short‐term effects of three important German WTWP implemented after a major reform in January 2005 (‘Hartz IV’), namely short training, further training with a planned duration of up to three months and public workfare programmes (‘One‐Euro‐Jobs’). Our analysis is based on a combination of a large‐scale survey and administrative data that is rich with respect to individual, household, agency level and regional information. We use this richness of the data to base the econometric evaluation on a selection‐on‐observables approach. We find that short‐term training programmes, on average, increase their participants' employment perspectives. There is also considerable effect heterogeneity across different subgroups of participants that could be exploited to improve the allocation of welfare recipients to the specific programmes and thus increase overall programme effectiveness.     

Eliciting preferences for collectively financed health programmes: the ‘willingness to assign’ approach

Improving public involvement in health system decision making stands as a primary health policy goal. However, still limited guidance is available on how best to elicit preferences for health care programmes. This study examines a contingent choice technique to elicit preferences among health programmes, and named ‘willingness to assign’ (WTAS). WTAS reveals relative (monetary-based) values of a set of competing public programmes under a hypothetical healthcare budget assessment. Experimental evidence is reported from a deliberative empirical study valuing ten health programmes in the context of the Catalan Health Service. Evidence from this experimental study reveals that within the context of multiple programmes, preferences are internally more consistent and slightly less affected by ‘preference reversals’ as compared to values revealed from an adapted technique eliciting the willingness to pay (WTP) extra taxes. Another finding suggests that although programmes promoting health received the higher relative valuation, those promoting other health benefits were valued highly.     

Item non-response on income and wealth questions

This study investigates the mechanisms determining item nonresponse focusing on three issues: First, is there significant heterogeneity in item non-response across financial questions and in the association of covariates with item non-response across outcomes? Second, can the informational value of surveys be improved by matching interviewers and respondents based on their characteristics? Third, how does offering a “don’t know” answer option affect respondent behavior? The questions are answered based on detailed survey and interviewer data from the German Socioeconomic Panel using a broad set of income and wealth outcomes. We find considerable heterogeneity in non-response across financial items, little explanatory power of interviewer-respondent matches and strong evidence that ‘‘don’t know’’ answers result from mechanisms that differ from those yielding valid responses and outright refusals to respond.     

What are the consequences of ignoring attributes in choice experiments? Implications for ecosystem service valuation

This paper investigates the sensitivity of choice experiment values 3AL for ecosystem services to ‘attribute non-attendance’. We consider three cases of attendance, namely that people may always, sometimes, or never pay attention to a given attribute in making their choices. This allows a series of models to be estimated which addresses the following questions: To what extent do respondents ignore attributes in choice experiments? What is the impact of alternative strategies for dealing with attribute non-attendance? Can respondents reliably self-report non-attendance? Do respondents partially attend to attributes, and what are the implications of this? Our results show that allowing for the instance of ‘sometimes attending’ to attributes in making choices offers advantages over methods employed thus far in the literature.     

The dynamics of fertility,family planning and female education in a developing economy

Unlike most empirical works on fertility analysis, this study is the first attempt to analyse the dynamics of fertility and its determinants with a particular focus on the role played by female education and family planning programmes in the context of a traditional society. The analysis is based on the application of the following dynamic time-series techniques in a multivariate context: cointegration, vector error-correction modelling and variance decompositions. These ‘dynamic’ tools are recently developed and hitherto untried in fertility analysis in the context of a poor developing economy, such as India. The results based on the above most recently developed methodology, broadly indicate that in the complex dynamic interactions, the importance of conventional ‘structural’ hypothesis as a ‘Granger-causal’ factor in bringing fertility down in the longer term cannot be denied. However, overall, in the short to long term, the findings appear to be more consistent with the recent ‘ideational’ hypothesis (emphasizing the critical role played by the two policy variables in the analysis- i.e. changes in the female secondary enrolment ratios, and family planning programmes- to ensure ‘initial’ fertility decline) than with the conventional ‘structural’ hypothesis (emphasizing a significant socio-economic structural change as a pre-condition for ‘initial’ fertility decline).     

Marginal WTP and Distance Decay: The Role of ‘Protest’ and ‘True Zero’ Responses in the Economic Valuation of Recreational Water Quality

We evaluate the sensitivity of distance decay in individuals’ stated willingness to pay (WTP) for water quality improvements in eutrophied lakes. We extend the standard model of contingent valuation (CV) by allowing individuals to adopt a sequential evaluation process consisting of two decision stages. In the first stage respondents decide whether they are ‘protesters’, have a WTP   \(=\)   ‘true zero’ or a \(\hbox {WTP}>0\) . Conditioned on a strictly positive WTP, we use Lee’s selectivity-corrected model to determine the magnitude of their WTP in the second stage. Using CV survey data from Norway we find significant distance decay in the first stage classification of respondents as ‘protesters’, ‘true zero’ WTP, or positive WTP. In the second stage model for positive WTP responses, we find little or no significant relationships when correcting for selection. Results suggest that previous findings of significant distance decay in contingent valuation of lake and river water in Europe may be driven by the definition of ‘protest’ and ‘true zero’ respondents. We find that WTP for water quality may be more useful as a qualitative indicator of political support for user financed water quality measures, than as a cardinal measure of marginal utility of water quality improvements.     

Maximizing benefits in project selection: a hybrid approach

Charitable foundations and government programmes should endeavour to allocate their limited resources to best serve their constituents. Yet, mathematical programming techniques are rarely used despite overwhelming evidence of their superiority in selecting projects that yield higher levels of total benefits. We present a novel ‘hybrid selection model’ that combines binary linear programming and heuristic rank-based models applied to two case studies. The first case focuses on providing services to women and shows a hybrid model would have selected the top three ‘signature’ projects and maintained an above-average overall project benefit while securing a 180% improvement in the number of projects funded, a 66% improvement in the number of women served and a 132% improvement in the total benefit achieved. In the second case, we apply the hybrid approach to data from the US government’s largest forest preservation programme and demonstrate that the hybrid approach could allow the programme to select up to 11 top-scoring projects while still achieving a 97% gain in the total overall benefit compared to their traditional method. These case studies show that the hybrid approach has the potential to be applied in a variety of settings and improve how foundations and programmes achieve their goals.     

Geopolitics Teaching and Worldviews: Making the Future Generation in Russia

What worldviews are passed on to students in Russian universities? This question can be approached by studying teaching in a discipline known as Geopolitics, which is offered as part of many degree programmes in Russian universities. The article makes use of observations of geopolitics lectures and geopolitics textbooks to study worldviews, understood as ontological, epistemological, and methodological assumptions about the geopolitical ‘reality’, the reality of geopolitics as a discipline, and how this discipline can and should be ‘discovered’ and studied. Based on the primary data, a story of the birth and development of geopolitics is constructed, and three discourses are identified. These discourses – geopolitics as a science, geopolitics as context-dependent, and geopolitics as state-centric – tell us about worldviews that espouse a positivist epistemology but vary in their degree of essentialism. Worldviews also inform us about Russia's geopolitical culture, which is, in this context, closer to the Westernisers' position than that of (Neo)Eurasianism.     

Towards an Austro–German theory of uneven economic development? A plea for theorising by inclusion

Based on Meir Kohn’s distinction between research programmes based on ‘value’ and ‘exchange’ (2004), this paper argues for a ‘production’ paradigm based on the tradition of Menger and Schumpeter. It is suggested that this production-based programme could use, as its starting point, Schumpeter’s (Wesen und Hauptinhalt der theoretischen Nationalökonomie, 1908) attempt to mediate in the Methodenstreit by arguing that different types of economic problems require theories at different levels of abstraction. This opens up for ‘theorising by inclusion’, an approach combining key elements both of traditional German economics and of Austrian economics in the Mengerian tradition.     

Tracking position premiums in discrete choice experiments

Eye-tracking was used to identify potential location ‘premiums’ in discrete choice experiments for certain positions in the computer screen in terms of increasing the visibility, general interest and attention of respondents. The search dynamics to choose the optimal alternative closely resembled the natural process of reading in a ‘Z’ motion going from left to right and top to bottom. An empirical application of water conservation showed that conservation practices in the production process were not statistically different than zero. On the other hand, respondents are interested in water conservation practices in their landscapes where they benefit directly from the sustainable practice.     

An economic evaluation of market development programmes for US dairy products

‘This study measured the effectiveness of US dairy export promotion programmes on increasing foreign demand and enhancing producers’ revenues. An import demand equation based on panel data was used to test whether export promotion has a positive and significant impact on US dairy exports. The effects of various promotion scenarios on the dairy market were then simulated, and benefit–cost ratios (BCRs) for these programmes were estimated. There were three key findings. First, the combined effort of public and private dairy export promotion expenditures had a positive and statistically significant impact on demand for US dairy products in the world market. The findings indicated that export promotion stimulated total dairy exports by 4.14 billion pounds, on average, per year, which represented 55.8% of total exports. Second, US dairy export promotion has been highly profitable for the nation’s dairy farmers. The calculated BCRs, based on assumed elasticity of supply, ranged from a low of 8.54 for the most elastic assumption to a high of 30.12. Third, from an optimality standpoint, dairy farmers are underinvesting in export promotion. The marginal BCRs ranged from a low of 3.79 to a high of 15.22, which means that, at the margin, increasing export promotion expenditures would be profitable for dairy farmers.     

Does don't know mean no? Analysis of 'don't know' responses in dichotomous choice contingent valuation questions

The ‘don't know’ response option in contingent valuation dichotomous choice questions is analysed using data from both willingness to pay and willingness to accept studies. An empirical analysis is conducted to determine whether respondents are stating a response similar to yes or no responses or a middle response. It is found that don't know responses are similar to no responses in the willingness to pay study. In the willingness to accept study, it is found that the ‘don't know’ responses are similar to a middle response. It is further suggested that researchers consider calculating ambivalence bounds when a don't know response is a middle response.     

Price competition and market transparency: evidence from a random response technique

Surveys can increase market transparency when information asymmetries are present—but this will only happen when respondents answer questions truthfully. Sometimes, however, it might not be in the respondents’ best interest to provide truthful information on their firm or market. This will be especially true when other firms can exploit any information they provide. Understanding when, and under what conditions, respondents answer questions truthfully is important to researchers studying these markets and to policymakers using firm surveys to identify ways of improving the business environment. Using data from two countries in South Asia, this paper uses a random response technique to identify respondents that do not answer truthfully. We label these respondents as ‘reticent’. We show that respondents become more reticent when their firms face intense price competition. We argue that this is because intense competition gives respondents a greater incentive to misreport information to reduce market transparency.     

Research collaboration and behavioural additionality: A New Zealand case study

Generating the greatest benefit from public research programmes is a major aim for industry managers and policy administrators alike. However, how to measure whether benefit has occurred createsf a considerable dilemma for managers and policy-makers. One approach centres upon the concept of ‘additionality’ or ‘what difference the policy has made’. Traditional ‘input additionality’ measures of subsequent research and development activity, for example, neither incorporate all impacts nor give adequate signals about adequate signals about aspects of ‘output additionality’, such as the impact on increased competitiveness at the level of the firm, or national competitiveness, the ultimate goal for the majority of research policies. An intermediate form of impact, ‘behavioural additionality’, centred upon changes in a firm's subsequent managerial behaviour, is considered to provide an alternative, yet compelling perspective on the impact of public support on the conduct of research. This study outlines empirical eveidence found for the various forms of additionality in a New Zealand collaborative research programme. It discusses how managers and policy administrators can exploit the occrrence of behavioural additionality to maximize the impact of a research policy, on the basis that modified behaviour is likely to strengthen a policy' latent abilityto influence the creation of output additionality. In such circumstances, the study suggests that managers and policy-makers should be identifying those interventions that lead to sustained improvements in mangerial practice, and in competitiveness, and should be managing their diffusion within firms and throughout industries.     

Detecting policy effects with wage rigidity and instability – evidence on the Taiwan labour market

With stagnant wages and growing productivity, a widening gap is becoming prevalent in global labour markets. The relationship between wages and productivity has become indeterminate, especially after the 2008 financial crisis. This article presents the phenomenon for why salary rarely follows up with productivity after an economy recovers. By using the GMM method, this study shows the interaction among wage, productivity and tightness, in which we illustrate the Taiwan labour market as an example to show how hiring system changes press wages away from an efficient allocation, causing instability and market failure. Surveying 35 labour markets for different industries, we reveal that the situation in the labour markets has drastically changed since 2008. We find that this resulted in a severe problem when the Taiwan firms got used to policies like ‘22K’, ‘fix-term contract’ and ‘unpaid leave’ programmes. These plans negatively impacted the economy and raised market failure with instability.     

Growth in transition countries

This study analyzes the impact of the speed of transition reforms on economic growth in transition countries in the context of the debate on ‘big‐bang vs. gradualist approach’. It builds a new indicator for the speed of transition reforms based on a three‐way principal component analysis. It shows that: (i) the speed of transition reforms Granger‐causes economic growth and there is no reverse causation; (ii) the impact of contemporaneous speed of transition reforms on economic growth is negative, but becomes positive in the longer horizon; and (iii) other factors, such as initial conditions and macroeconomic stabilization programmes, also drive economic growth. Although the first two results are robust to different estimators, the impact of control variables depends on the econometric specification.     

The Valuation of the IJmeer Nature Reserve using Conjoint Analysis

This paper describes an application of conjointanalysis. The subject of the valuation study isthe IJmeer nature reserve, which will be partlydestroyed when the new residential area IJburgis built. This paper addresses the followingquestion: ‘What is the extent of the loss ofgreen and recreational values?’. In this study,the conjoint analysis consists of threedifferent analyses based on a three-piecevaluation question. The respondents are askedto subsequently rank, mark and indicate theacceptability of a set of six cards.     

Corruption and economic activity: Micro level evidence from rural Liberia

We study how corruption affects economic activities of households in rural Liberia. A proxy of corruption of community leaders is obtained by directly monitoring the diversion of inputs associated with a development project. We measure quantities of these inputs twice; before and after the chief stored them, and interpret any ‘gaps’ between these measurements as indicative of diversion by the chief (or corruption). We use this ‘gap’ proxy to explain variation in economic behaviour across respondents, and find that corrupt community leaders cause reduced levels of income generating activities that are economically important: corruption leads to a 50% reduction in rice planted and to nearly equally large reductions in trade activity.     

Assessing structural change: the case of Austria

In recent years in many OECD countries the view became popular that a country has a healthy industrial structure if it has a high share of high-tech industries and a low share of traditional industries like textiles and steel. Therefore, industrial policy in these countries introduces programmes for reallocating from traditional sectors to high-tech sectors in order to increase national welfare. This paper questions this view by taking into account recent insights of international trade theory and shows, in the case of Austria, why conventional concepts of measuring and assessing structural change (used, e.g. by the OECD) are misleading and thus lead to wrong conclusions in the assessment whether structural adjustment has gone in the ‘right’ direction. More specifically, the ‘popular’ criteria ‘share and shift’, ‘high-tech versus traditional products’, and ‘R & D intensity’ are discussed and an alternative interpretation suggested by economic theory is given. Additionally, the paper illustrates the alternatie interpretation of these popular criteria on the example of the textile industry which, as a traditional consumer goods industry, managed to modernize largely without R & D of its own and was able to meet international competition successfully.     

Job preferences of students and new graduates in nursing

This article investigates the preferences of student and newly graduated nurses for pecuniary and nonpecuniary aspects of nursing jobs. It is the first study applying methods based on discrete choice experiments to a developed country nursing workforce. It is also the first to focus on the transition through university training and into work. This is particularly important as junior nurses have the lowest retention levels in the profession. We sample 526 individuals from nursing programmes in two Australian universities. Flexible and newly developed models combining heteroscedasticity with unobserved heterogeneity in scale and preference weights are estimated. Overall, salary remains the most important feature in increasing the probability that a job will be selected. ‘Supportive management/staff’ and ‘quality of care’ follow as the most important attributes from a list of 11 nonpecuniary characteristics. However, the subset of new graduates rank ‘supportive management/staff’ above salary increases, emphasizing the importance of a supportive workplace in the transition from university to the workplace. We find substantial preference heterogeneity and some attributes, such as the opportunity for clinical rotations, are found to be attractive to some nurses while seen as negative by others. Nursing retention could be improved by designing different employment packages to appeal to these different tastes.