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Effects of outsourcing employment services: evidence from a randomized experiment

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Author Info

  • Bennmarker, Helge

    ()
    (IFAU - Institute for Labour Market Policy Evaluation)

  • Grönqvist, Erik

    ()
    (IFAU - Institute for Labour Market Policy Evaluation)

  • Öckert, Björn

    ()
    (IFAU - Institute for Labour Market Policy Evaluation)

Abstract

In many countries welfare services that traditionally have been provided by the public sector are increasingly being contracted out to private providers. But are private contractors better at providing these services? We use a randomized experiment to empirically assess the effectiveness of contacting out employment services to private placement agencies. Our results show that unemployed at private placement agencies have a much closer interaction with their placement worker than unemployed at the Public Employment Service (PES). In particular, unemployed at private agencies receive more assistance in improving their job search technology. We do not find any overall difference in the probability of employment between private placement agencies and the PES), but this hides important heterogeneities across different types of unemployed. We find evidence that private providers are better at providing em¬ployment services to immigrants, and also indications that they may be worse for adolescents. Any effects tend to fade away over time.

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Bibliographic Info

Paper provided by IFAU - Institute for Evaluation of Labour Market and Education Policy in its series Working Paper Series with number 2009:23.

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Length: 42 pages
Date of creation: 30 Nov 2009
Date of revision:
Publication status: Published as Bennmarker, Helge, Erik Grönqvist and Björn Öckert, 'Effects of outsourcing employment services: evidence from a randomized experiment' in Journal of Public Economics, 2013, pages 68-84.
Handle: RePEc:hhs:ifauwp:2009_023

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Related research

Keywords: Job placement; Contracting out;

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Cited by:
  1. Jönsson, Lisa & Skogman Thoursie, Peter, 2012. "Does privatisation of vocational rehabilitation improve labour market opportunities? Evidence from a field experiment in Sweden," Working Paper Series 2012:2, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  2. Behaghel, Luc & Crépon, Bruno & Gurgand, Marc, 2012. "Private and Public Provision of Counseling to Job-Seekers: Evidence from a Large Controlled Experiment," IZA Discussion Papers 6518, Institute for the Study of Labor (IZA).
  3. Forslund, Anders, 2009. "Labour supply incentives, income support systems and taxes in Sweden," Working Paper Series 2009:30, IFAU - Institute for Evaluation of Labour Market and Education Policy.

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