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Public or private job placement services—Are private ones more effective?

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  • Gesine Stephan

    (IAB, Friedrich-Alexander Universität Erlangen-Nürnberg (FAU), and IZA,Germany)

Abstract

Expenditures on job placement and related services make up a substantial share of many countries’ GDP. Contracting out to private providers is often proposed as a more efficient alternative to the state provision of placement services. However, the responsible state agency has to design and monitor sufficiently complete contracts to ensure that the private contractors deliver the desired quality of services. None of the recent empirical evidence indicates that contracting out is necessarily more effective or more efficient than public employment services.

Suggested Citation

  • Gesine Stephan, 2016. "Public or private job placement services—Are private ones more effective?," IZA World of Labor, Institute of Labor Economics (IZA), pages 285-285, August.
    • Handle: RePEc:iza:izawol:journl:y:2016:n:285
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    References listed on IDEAS

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    1. Blank, Rebecca M, 2000. "When Can Public Policy Makers Rely on Private Markets? The Effective Provision of Social Services," Economic Journal, Royal Economic Society, vol. 110(462), pages 34-49, March.
    2. Luc Behaghel & Bruno Cr?pon & Marc Gurgand, 2014. "Private and Public Provision of Counseling to Job Seekers: Evidence from a Large Controlled Experiment," American Economic Journal: Applied Economics, American Economic Association, vol. 6(4), pages 142-174, October.
    3. Bart Cockx & Stijn Baert, 2015. "Contracting Out Mandatory Counselling and Training for Long-Term Unemployed. Private For-Profit or Non-Profit, or Keep it Public?," CESifo Working Paper Series 5587, CESifo.
    4. Bennmarker, Helge & Grönqvist, Erik & Öckert, Björn, 2013. "Effects of contracting out employment services: Evidence from a randomized experiment," Journal of Public Economics, Elsevier, vol. 98(C), pages 68-84.
    5. Bernhard, Sarah & Wolff, Joachim, 2008. "Contracting out placement services in Germany : is assignment to private providers effective for needy job-seekers?," IAB-Discussion Paper 200805, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    6. Koning, Pierre & van de Meerendonk, Arthur, 2014. "The impact of scoring weights on price and quality outcomes: An application to the procurement of Welfare-to-Work contracts," European Economic Review, Elsevier, vol. 71(C), pages 1-14.
    7. Rehwald, Kai & Rosholm, Michael & Svarer, Michael, 2015. "Are Public or Private Providers of Employment Services More Effective? Evidence from a Randomized Experiment," IZA Discussion Papers 9365, Institute of Labor Economics (IZA).
    8. Laun, Lisa & Thoursie, Peter Skogman, 2014. "Does privatisation of vocational rehabilitation improve labour market opportunities? Evidence from a field experiment in Sweden," Journal of Health Economics, Elsevier, vol. 34(C), pages 59-72.
    9. Gerhard Krug & Gesine Stephan, 2016. "Private and Public Placement Services for Hard-to-Place Unemployed," ILR Review, Cornell University, ILR School, vol. 69(2), pages 471-500, March.
    10. Homrighausen, Pia, 2014. "Differential pricing and private provider performance," IAB-Discussion Paper 201425, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
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    Citations

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    Cited by:

    1. Briscese, Guglielmo & Leibbrandt, Andreas, 2022. "Designing the market for job vacancies: A trust experiment with employment centers staff," Labour Economics, Elsevier, vol. 78(C).
    2. Martins, Pedro S., 2021. "Which Occupations Do Jobseekers and Firms Look For? Evidence from Three Public Employment Services," GLO Discussion Paper Series 971, Global Labor Organization (GLO).
    3. Ayaita, Adam & Grund, Christian & Pütz, Lisa, 2021. "Job Placement via Private vs. Public Employment Agencies: Investigating Selection Effects and Job Match Quality in Germany," IZA Discussion Papers 14024, Institute of Labor Economics (IZA).
    4. Adam Ayaita & Christian Grund & Lisa Pütz, 2022. "Job Placement via Private vs. Public Employment Agencies: Investigating Selection Effects and Job Match Quality in Germany," Schmalenbach Journal of Business Research, Springer, vol. 74(2), pages 137-162, June.

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    More about this item

    Keywords

    unemployment; employment services; privatization; contracting out;
    All these keywords.

    JEL classification:

    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings
    • H44 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Goods: Mixed Markets
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs

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