People who receive unemployment benefits usually have to comply with statutory requirements while being unemployed. For example, they may have to send a minimum number of job applications each month or accept job offers. If they do not comply, they can be sanctioned. A benefit sanction is a (usually temporary) reduction of unemployment benefits. These benefit sanctions are the subject of controversial policy debates: proponents argue that benefit sanctions are needed to ensure benefit recipient's compliance with benefit rules and increase incentives for employment uptake. Opponents argue that benefit sanctions do not contribute to a successful labour market integration, as they may incentivise benefit recipients to take up jobs with low wages, for example. In recent years, labour market policies increasingly aim to raise not only benefit recipients' employment uptake, but also their re-employment quality, for example, their wages. How benefit sanctions affect employment uptake and employment quality is thus a relevant question for policymakers. From the perspective of economic job search theory, both, positive effects of benefit sanctions on employment uptake and negative effects on employment quality are possible. Several studies confirm such effects of benefit sanctions. This dissertation provides further evidence on the effect of benefit sanctions on employment and employment quality outcomes of benefit recipients. The three studies in this dissertation focus on welfare recipients in Germany and use large-scale administrative data from the Statistics Department of the Federal Employment Agency in the period between 2008 and 2018. The first study (chapter 2}) analyses the effect of imposing a benefit sanction on employment outcomes and employment quality in the long run over a period of five years after the sanction. On the one hand, it could be better for welfare recipients to take up (low-quality) employment after a sanction compared with remaining unemployed. A long duration of unemployment can harm, for example, the benefit recipient's human capital, thus decreasing her or his employment chances. On the other hand, it could be worse for welfare recipients to take up (low-quality) employment after a sanction compared with continuing job search. Low-quality employment can be less stable than high-quality employment, thus making it more likely that welfare recipients become unemployed again. The analysis focuses on the effect of a first benefit sanction using an entropy balancing approach that compares sanctioned welfare recipients with statistically similar welfare recipients who are not sanctioned. The results show that, in line with previous research, benefit sanctions increase the employment probability in the first months after the benefit sanction. In the long run, four to five years after the sanction, the employment probability of sanctioned benefit recipients is lower compared with the comparison group of non-sanctioned benefit recipients. Moreover, the results suggest long-run negative effects on employment quality, for example, on the probability to be in employment with comparatively high earnings. The second study (chapter 3) analyses the effect of a benefit sanction for the partner of the sanctioned person. The chapter is joint work together with Gerard J. van den Berg, Arne Uhlendorff, and Joachim Wolff. A benefit reduction because of the non-compliance of one of the household members can affect the behaviour of another person living in the same household. The analysis focuses on welfare recipients living together in couple households, separated by East and West Germany. The study analyses the effects of the first own and the first partner's sanction using a duration analysis approach. The results show that not only the own sanction, but also the partner's sanction, increases employment uptake. The partner sanction effect is more pronounced for women. The results further show that the own sanction negatively affects re\-/employment earnings for men in West Germany, but the own and the partner sanction have a positive effect on re\-/employment earnings for women in West Germany. No significant effects on re\-/employment earnings are found for welfare recipients in East Germany. Finally, after the partner's sanction, welfare recipients are less likely to be sanctioned, which suggests that sanctions increase the compliance with statutory requirements. The previous chapters analyse the effect of imposing a sanction, which is called the ex-post effect of the sanction. Welfare recipients who are not sanctioned may also react to the possibility of a being sanctioned, as they anticipate this possibility and change their behaviour accordingly. The third study (chapter 4) analyses such effects of sanctions, also referred to as ex-ante effects of sanctions. The analysis uses differences in the sanction intensities of the caseworker teams that welfare recipients are assigned to (such effects are also referred to as regime effects). The results show that the sanction intensity increases employment uptake -- particularly of low-quality employment -- and negatively impacts average earnings over five years. However, a moderate sanction intensity compared to a low sanction intensity increases employment uptake and earnings. A high compared to a moderate sanction intensity further increases employment uptake, but decreases earnings. The analysis further shows that not only sanctions, but also other labour market policy measures, have ex-ante effects. Overall, this dissertation confirms findings of previous research and provides several new insights into the effects of benefit sanctions on employment and employment quality outcomes. The results of this dissertation together with the results of previous research underline that sanctions increase benefit recipients' compliance with benefit rules and employment uptake. However, this often comes at the cost of reduced employment quality for benefit recipients. Based on these results, the dissertation discusses policymakers' options to reform benefit sanction regulations to balance, potentially competing, policy objectives of raising benefit recipients' employment uptake and employment quality.