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

On the labour markets, the last decades were characterised by structural supply-side reforms in many countries. Following its hawkish reforms from the 2000s, recently, Germany made a dovish turnaround. Conditions in basic income support for unemployed became more generous. Before, a sanctions moratorium was applied. We analyse the consequences for job findings. Building on large administrative data, we use a labour market matching and a control group approach. The moratorium dampened job findings by more than seven percent and the subsequent benefit reform by more than six percent – about half of the positive effect of the 2000s reform.

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