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We discuss a new scheme of subsidized jobs for unemployed people with extremely low job finding prospects. This scheme, referred to as Social Labour Market, primarily intends to promote their social inclusion. Research on public employment schemes has shown that it is of utmost importance to define very narrow criteria for participation in order to avoid lock-in-effects. Due to health issues and other severe employment impediments of the participants, the design of a social labour market should allow for flexible work arrangements and include some kind of mentoring (“job coaches”). We conclude that the scheme planned by the German government basically meets many criteria recommended by labour market researchers but still bears some risk of “creaming”. We recommend to start with a small number of participants. This should help to test the process of assigning participants and assess the effectiveness of different designs of the scheme before boosting the number of participants to the ultimate size.

Teilhabe für arbeitsmarktferne Arbeitslose durch einen Sozialen Arbeitsmarkt – Chancen und Risiken eines notwendigen Instruments