And Then There Were Four...How Many (and Which) Measures of Active Labor Market Policy Do We Still Need?

Through the Hartz reforms, German active labor market policy was fundamentally restructured and systematically evaluated. This paper reviews the recent evaluation findings and draws conclusions for the future setup of active labor market policies. It argues in favor of a reduced range of active labor market policy schemes focusing on programs with proven positive effects (that currently are wage subsidies, training, start-up grants and placement vouchers). It calls for a systematic evaluation of all instruments not scrutinized so far, and for a permanent process of decentralized experimentation and re-evaluation.