Estimating the Effect of Counseling and Monitoring the Unemployed Using a Job Search Model

This paper examines the impact of the Counseling and Monitoring program for the unemployed with particular reference to their job finding rate, application intensity, and matching probability. The effectiveness of Counseling and Monitoring is measured by using a job search model in which the job finding rate is equal to the product of the application intensity and the matching probability. Counseling and Monitoring is an intensive job search assistance program designed to help unemployed people receiving unemployment benefits to find a job as quickly as possible. The empirical analysis is based on data from a social experiment. A sample of the inflow into unemployment was randomly assigned to a treatment and a control group. The empirical results, based on formal reduced-form models, show that Counseling and Monitoring does reduce the time taken to find a job because people participating in the program make more applications than those who are not participating, although no differences are found in matching probabilities.