<mark>with social welfare centers and converted into costumer-orientated one-stop centers, offering individual profiling, job search assistance, social services, and administration of benefit payments. Furthermore, a new activation strategy according to the principles of “rights and duties” was put in place. First, the entire unemployment and social benefit system was redesigned, aligning incentives to take up work. Unemployment benefit levels and durations were reduced. Eligibility for subsistence allowances were changed according to a person’s ability to work rather than previous contribution payments. Benefit recipients were made subject to sanctions, mainly though benefit reductions, if duties are not complied with. Second, priority was given to measures that support unemployed workers who are pro-actively seeking integration into regular employment, most importantly through wage subsidies and start-up subsidies. Third, jobs with reduced social security contributions were introduced (“midi-jobs” with monthly earnings of roughly between EUR 300 and 800), and the regulation for jobs exempt from such contributions was reformed (“mini-jobs” with roughly less than EUR 300 per month) with the clear intention to provide higher incentives for individuals to take on employment in the low-wage sector.</mark> <mark>The results of reforms on temporary employment are mixed. Between January and October 2006, the number of Hartz IV claimants (beneficiaries of the newly combined long-term unemployment assistance and social assistance) in jobs liable for social insurance contributions (“midi-jobs” or regular jobs) increased by 47 percent, while the number of Hartz IV claimants working part-time increased by 30 percent and the number in marginal employment (“mini-jobs”) rose by 14 percent. This is certainly partly due to the fact that workers who were surviving on low wages without any form of income support before the reform were able to boost their income with Hartz IV benefits after the reform. The reform of temporary work regulations significantly increased the number of employees in the temporary work sector in the two quarters after the reform. However, Caliendo and Wrohlich (2006) carried out an ex-post evaluation to identify the short-run effects of this reform and a found limited and differentiated impact looking only at single males.</mark> <mark>The German experience points out that even for a country with relatively rigid labor market regulations and policies, reforms are possible although they are politically difficult to achieve. This type of reform could help make the labor market more flexible and the workers more adaptable in their transition into new jobs from old jobs. Another revelation is that systematically evaluating the impact of ALMPs would enable policy makers to use the lessons learned in adjusting their employment programs in order to have more effective and efficient programs in the future.</mark> <mark>Source: Authors’ review of literature based on Caliendo and Wrohlich (2006); Goethe Institut (2007); Jacobi and Kluve (2006); RWI Essen et al. (2005)</mark> Finally, successful ALMPs require that governments have an overarching strategy, for example, setting up solar panel installation trainings is more likely to be successful in the presence of a long-term solar support policy. This means that labor market policies should be closely coordinated with overall climate mitigation policies.

# **d.** Social Protection

Climate change policy, as discussed in this paper, will generate significant labor reallocation across sectors in many countries, with potentially important redistributive effects. In some countries, workers will need to be reallocated between sectors and it will likely take significant time and training for them to find new jobs. In any case, having a strong social protection system will be key; not only in providing a safety net, but also in accommodating the climate change policy shock and helping workers make efficient labor market transitions (World Bank, 2011b).

Yet, there is significant variation in the readiness of social protection systems to respond to shocks across countries in the region as discussed in Section 2. The recent financial and economic crisis has provided 33