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Monitoring Job Offer Decisions, Punishments, Exit to Work, and Job Quality

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  • van den Berg, Gerard J
  • Vikström, Johan

Abstract

Unemployment insurance systems include monitoring of unemployed workers and punitive sanctions if job search requirements are violated. We analyze the effect of sanctions on the ensuing job quality, notably on wage rates and hours worked, and we examine how often a sanction leads to a lower occupational level. The data cover the Swedish population over 1999-2004. We estimate duration models dealing with selection on unobservables. We use weighted exogenous sampling maximum likelihood to deal with the fact the data register is large whereas observed punishments are rare. We also develop a theoretical job search model with monitoring of job offer rejection vis-a-vis monitoring of job search effort. The observation window includes a policy change in which the punishment severity was reduced. We find that the hourly wage and the number of hours are on average lower after a sanction, and that individuals move more often to a lower occupational level, incurring human capital losses. Monitoring offer rejections is less effective than monitoring search effort.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 7460.

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Date of creation: Sep 2009
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Handle: RePEc:cpr:ceprdp:7460

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Keywords: case worker; duration; hours worked; job offer; offer rejection; sanction; search effort; unemployment; wage; weighted exogenous sampling maximum likelihood;

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References

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  1. Gaure, Simen & Røed, Knut & Zhang, Tao, 2005. "Time and Causality: A Monte Carlo Assessment of the Timing-of-Events Approach," Memorandum 19/2005, Oslo University, Department of Economics.
  2. Berg, Gerard J. van den & Klaauw, Bas van der & Ours, Jan C. van, 1998. "Punitive sanctions and the transition rate from welfare to work," Serie Research Memoranda 0033, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
  3. Imbens, G. & Lancaster, T., 1991. "Efficient Estimation and Stratified Sampling," Papers 9145, Tilburg - Center for Economic Research.
  4. repec:fth:iniesr:481 is not listed on IDEAS
  5. Jaap Abbring & Gerard van den Berg, 2005. "Social experiments and instrumental variables with duration outcomes," IFS Working Papers W05/19, Institute for Fiscal Studies.
  6. David Gray, 2003. "National Versus Regional Financing and Management of Unemployment and Related Benefits: The Case of Canada," OECD Social, Employment and Migration Working Papers 14, OECD Publishing.
  7. Jaap H. Abbring & Gerard J. van den Berg, 2003. "The Nonparametric Identification of Treatment Effects in Duration Models," Econometrica, Econometric Society, vol. 71(5), pages 1491-1517, 09.
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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. The punishment of unemployment insurance cheaters
    by Economic Logician in Economic Logic on 2009-09-16 15:24:00
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Cited by:
  1. van der Klaauw, Bas & van Ours, Jan C., 2010. "Carrot and Stick: How Reemployment Bonuses and Benefit Sanctions Affect Job Finding Rates," IZA Discussion Papers 5055, Institute for the Study of Labor (IZA).
  2. Blasco, Sylvie & Pertold-Gebicka, Barbara, 2013. "Employment policies, hiring practices and firm performance," Labour Economics, Elsevier, vol. 25(C), pages 12-24.
  3. Arni, Patrick & Lalive, Rafael & van Ours, Jan C., 2009. "How Effective Are Unemployment Benefit Sanctions?," CEPR Discussion Papers 7541, C.E.P.R. Discussion Papers.
  4. Jonas Maibom Pedersen & Michael Rosholm & Michael Svarer, 2012. "Experimental Evidence on the Effects of Early Meetings and Activation," Economics Working Papers 2012-26, School of Economics and Management, University of Aarhus.

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  1. Economic Logic blog

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