The dovish turnaround: Germany's social benefit reform and job findings

On the labour markets, recent decades were characterised by structural supply-side reforms in many countries. Following its hawkish reforms from the 2000s, Germany has recently made a dovish turnaround. Conditions in basic income support for unemployed became more generous. Before, a temporary moratorium on sanctions had been imposed, providing a unique policy shift. We analyse the short-run consequences for job findings, building on large administrative data and a novel control group approach. The moratorium dampened job findings by four percent and the subsequent benefit reform by almost six percent in the first year. Other factors played a still larger role for the recent weakening of job findings.