The threat effect of participation in active labor market programs on job search behavior of migrants in Germany

Author: Annette Bergemann, And Marco Caliendo, And Gerard J. van den Berg, And Klaus F. Zimmermann, And

Published in: International Journal of Manpower, vol. 32, no. 7, pp .777-795

Summary of Working paper 2011:4

Labor market programs may affect unemployed individuals’ behavior before they enroll. Such ex ante effects may differ according to ethnic origin. We apply a novel method that relates self-reported perceived treatment rates and job search behav­ioral outcomes, such as the reservation wage or search intensity, to each other. We compare German native workers with migrants with a Turkish origin or Central and Eastern European (including Russian) background. Job search theory is used to de­rive theoretical predictions. We examine the omnibus ex ante effect of the German ALMP system, using the novel IZA Evaluation Data Set, which includes self-reported assessments of the variables of interest as well as an unusually detailed amount of in­formation on behavior, attitudes and past outcomes. We find that the ex ante threat effect on the reservation wage and search effort varies considerably among the groups considered.