More market in public job creation : on the allocation under competitive conditions of §249h- measures at the Treuhandanstalt

Abstract

"Since 1994 the Treuhandanstalt has publicly put out for tender employment projects in accordance with §249h of the Employment Promotion Act and has allocated them on a competitive basis. As the allocation of these projects to private companies has always been called for but only rarely put into practice, the Treuhandanstalt therefore acts as a forerunner. The effects of this allocation process are the main focus of this article. With reference to the current discussion of the advantages and disadvantages of active labour market policy, the requirements which have to be fulfilled for publicly supported employment and which provide the basis for the evaluation of the Treuhandanstalt's process of invitation to tender are named. The effects on the following requirements are discussed individually: efficiency and refunding, interlinking of labour market policy and regional structural policy and creation of transitions into the primary labour market, both on an individual and a project level. This analysis includes previously unpublished details from the Treuhandanstalt on their tendering process as well as results of interviews with experts. The results can be summarised as follows: - The inclusion of competition has a clearly positive effect on efficiency and the refunding rate of the projects. Decisive for this are economies and the reduction of displacement and substitution effects. - The process reinforces the interlinking of labour market policy and regional structural policy in the first place through procedural integration of central parties. - On the individual level, transitions into regular employment could be promoted amongst other things through the effects of acquaintance and reputation. From the data available, however, this effect does not seem to differ greatly from projects which were not put out to tender. - On the project level, possibilities of transition into the primary labour market, for example through setting up small businesses, are judged with scepticism. Although the tendering process does in principle create favourable conditions, the possibilities of setting up small businesses appear to be limited, as the market potential in restoration, demolition and dismantling work is largely exhausted. The concluding chapter is devoted to the question of the applicability of the Treuhand model for a larger sphere of labour promotion projects. §249 designates an employment subsidy for work in the fields of environment, social services and youth assistance." (Author's abstract, IAB-Doku) ((en))

Cite article

Rabe, B. & Emmerich, K. (1996): Mehr Markt in der öffentlichen Beschäftigungsförderung. Zur wettbewerblichen Vergabe von § 249h-Maßnahmen bei der Treuhandanstalt. In: Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Vol. 29, No. 1, p. 93-105.