Project management: PD Dr. Michael Neugart

Duration: September 2004 to August 2007 (on hold between October 2005 - September 2006)
Funding: Deutsche Forschungsgemeinschaft

The aim of the research project is to develop formal explanatory models that can shed light on why particular labour market policies come to be adopted in certain societies. In this sense, the project goes beyond the economic research conducted to date, which is concerned with the efficiency of labour market policies. This project is concerned rather with how differences in the selection of labour market policy instruments can be explained. Using methods developed in economics, the project will investigate the policy choices made by actors aware of the effects of labour market policy instruments on market performance.

There is considerable variance among countries in labour market policy, as measured by indicators such as the level of financial support for the unemployed, the scope of active labour market policy or the strength of dismissal protection regulations. These differences between countries and, to some extent, over time as well make labour market policy particularly well suited as a basis for developing explanatory models for policy choices.

The starting assumption for the research project is that institutions such as voting systems, for example, legislative procedures or the influence of interest groups and the reaction of markets to labour market policy instruments are important factors in explaining the existence of certain labour market policies and the forms they take.