Employment Subsidies for Long-Term Welfare Benefits Recipients: Reconciling Programmes Goals with Needs of Diverging Population Groups

We discuss the design and examine the inflow of participants in two new subsidised employment programmes (§ 16 e/i German Social Code II) that aim to help long-term welfare recipients in Germany to find a job and increase their social participation. We describe the programmes in terms of goals and eligibility criteria and proceed to analyse recent inflows into the programmes using Latent Class (Cluster) Analysis in an exploratory manner. Our findings provide evidences on the considerable heterogeneity in the programmes' inflows. The resulting typology does not only connect individual biographical and socioeconomic characteristics with greater sociohistorical processes, but give strong hints towards different needs of the various participant groups which could be treated differently in the programmes. Keeping up and improving social integration through subsidized labour is a high priority treatment to be considered for some participant groups, while others should be considered more for improvements of education and professional training, even if their biographies so far show most distance to both. Our results provide first guidance on how to adjust programme's design to the needs and capabilities of heterogeneous groups of long-term unemployed and welfare benefit recipients.