Do job creation schemes improve the social integration and well-being of the long-term unemployed?

In this paper, we analyze the effects of a German job creation scheme (JCS) on the social integration and wellbeing of long-term unemployed individuals. Using linked survey and administrative data for participants and a group of matched non-participants, we find significant positive effects of being employed within this program. Participants with health impairments or an above-average duration of welfare dependence benefit more. The effects decline over the course of the program, which is explained by an increase in both the share of participants who leave the program, and of control individuals who find a job. The results suggest that JCSs should target those with the lowest employment prospects.