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The short-run and long-run effects of decentralizing public employment services

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  • Michael Weber

Abstract

A German policy experiment from 2012 allows me to identify the short-run and longrun causal effects of decentralization on the placement efficiency of public employment services (PES). I exploit variation over time and across districts with different types of PES in a difference-in-differences framework. Decentralization had significant negative effects on placements in the short run, but not in the long run. This points to a transition process, during which caseworkers acquire relevant placement skills. Decentralization also had a persistent negative effect on sanctions on the welfare recipients, which probably indicates a reluctance of local authorities to reduce the well-being of their potential voters.

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  • Michael Weber, 2016. "The short-run and long-run effects of decentralizing public employment services," ifo Working Paper Series 209, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    • Handle: RePEc:ces:ifowps:_209
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    More about this item

    Keywords

    Public employment services; job placement; matching efficiency; difference-in-differences;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J48 - Labor and Demographic Economics - - Particular Labor Markets - - - Particular Labor Markets; Public Policy

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