Abstract

This project analyses sanctions against young welfare recipients in Germany. Sanctions due to specific reasons imply much higher benefit cuts for welfare recipients aged less than 25 years than for those aged at least 25 years. We study, whether the impact of these sanctions speeds up the exit from unemployment into employment or exits from welfare receipt without any employment. One issue of the analysis will be, wether such impacts vary over different socio-demographic groups of young welfare recipients. Moreover, we will study wether the sanctions have an impact on the level of monthly wages, that the young welfare recipients receive in the first job that they take up to end unemployment. We analyse a sample for young unemployed wefare recipients who started unemployment in the period of Januar 2007 to March 2008 that was drawn from administrative records. The econometric duration analysis, a timing of events approach, models jointly the time until the start of a sanctions and the time until an exit into one of the different destination statest considered.