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Contracting Out Mandatory Counselling and Training for Long-Term Unemployed. Private For-Profit or Non-Profit, or Keep it Public?

Author

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  • Bart Cockx

    (Ghent University (SHERPPA), Université catholique de Louvain (IRES), IZA and CESifo)

  • Stijn Baert

    (Ghent University (SHERPPA), University of Antwerp, Université catholique de Louvain (IRES) and IZA)

Abstract

This study evaluates the effectiveness of contracting out mandatory publicly provided counselling and training for long-term unemployed in Flanders (Belgium) to private for-profit and non-profit organisations (FPOs and NPOs). A multivariate transition model exploits timing-of-events and novel exclusion restrictions to account for selection on unobservables. Overall, the intervention was highly effective in reducing unemployment duration, but also spurred employment instability and withdrawals from the labour force. FPOs slightly, but significantly enhanced exits to employment without reinforcing recidivism relative to the public provider but not significantly relative to NPOs. FPOs also charged lower prices and hence were the best performing providers.

Suggested Citation

  • 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?," LIDAM Discussion Papers IRES 2015022, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    • Handle: RePEc:ctl:louvir:2015022
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    Cited by:

    1. Danula K. Gamage & Pedro S. Martins, 2018. "Evaluating Public-Private Partnerships in Employment Services: The Case of the UK Work Programme," Working Papers 87, Queen Mary, University of London, School of Business and Management, Centre for Globalisation Research.
    2. Lalive, Rafael & Cottier, Lionel & Flueckiger, Yves & Kempeneers, Pierre, 2018. "Does Job Search Assistance Really Raise Employment?," CEPR Discussion Papers 13133, C.E.P.R. Discussion Papers.
    3. 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.
    4. 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).
    5. Rehwald, Kai & Rosholm, Michael & Svarer, Michael, 2017. "Do public or private providers of employment services matter for employment? Evidence from a randomized experiment," Labour Economics, Elsevier, vol. 45(C), pages 169-187.

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    More about this item

    Keywords

    Contracting out of employment services; non-profit versus profit; private provision of public services; timing-of-events; long-term unemployment;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • H44 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Goods: Mixed Markets
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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