How do the employment effects of job creation schemes differ with respect to the foregoing unemployment duration?

Based on new administrative data for Germany covering entrances into job creation schemes between July 2000 and May 2001, we evaluate the effects of this active labour market policy programme considering the timing of treatment in the individual unemployment spell. Applying propensity score matching in a dynamic setting where the time until treatment in the unemployment spell is stratified into quarters, regional (East and West Germany) as well as gender differences are considered in the estimation. The results in terms of employment present a heterogeneous, but disappointing picture. For West Germany, most of the estimates are insignificant at the end of the observation period, and only one positive exception could be established. In East Germany, none of the groups experiences an improvement of the labour market situation, but the employment chances tend to be reduced due to participation even 30Â months after start of programmes.Evaluation Active labour market policy Job creation schemes Administrative data Propensity score matching Hidden bias