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Does Job-Search Assistance Affect Search Effort and Outcomes ? A Microeconometric Analysis of Public Versus Private Search Methods

  • Denis Fougère

    (Crest)

  • Jacqueline Pradel

    (Crest)

  • Muriel Roger

    (Crest)

In this paper, we examine the disincentive effects of the public employment serviceon the search effort of unemployed workers and on their exit rate from unemployment.For that purpose, we specify a structural search model with fixed and variablecosts of search in which unemployed workers select their optimal search intensitygiven the exogenous arrival rate of job offers coming from the public employmentagency. Because the theoretical effect of an increase in this exogenous job offer arrivalrate on the structural exit rate from unemployment is ambiguous, we estimatethis model using individual unemployment duration data. Our results show that theexit rate from unemployment increases with the arrival rate of job contacts obtainedby the public employment service, especially for low-educated and low-skilled workers.They also show that the search effort is more costly for low-educated womenand low-skilled adult unemployed workers. This last result suggests that a publicemployment agency that matches searchers and employers is beneficial, in the sensethat it saves searchers in terms of search costs they would otherwise bear.

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Paper provided by Centre de Recherche en Economie et Statistique in its series Working Papers with number 2005-33.

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Date of creation: 2005
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Handle: RePEc:crs:wpaper:2005-33
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  1. Addison, John T. & Portugal, Pedro, 2001. "Job Search Methods and Outcomes," IZA Discussion Papers 349, Institute for the Study of Labor (IZA).
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  12. van Ours, J.C. & Lindeboom, M. & Renes, G., 1994. "Matching Employers and Workers : an Empirical Analysis on the Effectiveness of Search," Other publications TiSEM 3ada67c1-145c-42d0-8726-f, School of Economics and Management.
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  17. van den Berg, Gerard J & van der Klaauw, Bas, 2001. "Counselling and Monitoring of Unemployed Workers: Theory and Evidence from a Controlled Social Experiment," CEPR Discussion Papers 2986, C.E.P.R. Discussion Papers.
  18. Bloemen, Hans G., 2001. "Job search, search intensity and labour market transitions : an empirical analysis," Serie Research Memoranda 0037, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
  19. van den Berg, Gerard J, 1994. "The Effects of Changes of the Job Offer Arrival Rate on the Duration of Unemployment," Journal of Labor Economics, University of Chicago Press, vol. 12(3), pages 478-98, July.
  20. Harry J. Holzer, 1987. "Job search by employed and unemployed youth," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 40(4), pages 601-611, July.
  21. Koning, Pierre & Berg, Gerard J. van den & Ridder, Geert, 1997. "A structural analysis of job search methods and subsequent wages," Serie Research Memoranda 0036, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
  22. John M. Barron & Wesley Mellow, 1979. "Search Effort in the Labor Market," Journal of Human Resources, University of Wisconsin Press, vol. 14(3), pages 389-404.
  23. Bonnal, Liliane & Fougere, Denis & Serandon, Anne, 1997. "Evaluating the Impact of French Employment Policies on Individual Labour Market Histories," Review of Economic Studies, Wiley Blackwell, vol. 64(4), pages 683-713, October.
  24. Hanemann, W Michael, 1984. "Discrete-Continuous Models of Consumer Demand," Econometrica, Econometric Society, vol. 52(3), pages 541-61, May.
  25. Morgan, Peter B, 1983. "Search and Optimal Sample Sizes," Review of Economic Studies, Wiley Blackwell, vol. 50(4), pages 659-75, October.
  26. Dale Mortensen, 1984. "Job Search and Labor Market Analysis," Discussion Papers 594, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  27. Blau, David M & Robins, Philip K, 1990. "Job Search Outcomes for the Employed and Unemployed," Journal of Political Economy, University of Chicago Press, vol. 98(3), pages 637-55, June.
  28. van den Berg, Gerard J, 1990. "Nonstationarity in Job Search Theory," Review of Economic Studies, Wiley Blackwell, vol. 57(2), pages 255-77, April.
  29. van den Berg, Gerard J, 1990. "Search Behaviour, Transitions to Nonparticipation and the Duration of Unemployment," Economic Journal, Royal Economic Society, vol. 100(402), pages 842-65, September.
  30. Flinn, Christopher J & Heckman, James J, 1983. "Are Unemployment and Out of the Labor Force Behaviorally Distinct Labor Force States?," Journal of Labor Economics, University of Chicago Press, vol. 1(1), pages 28-42, January.
  31. Holzer, Harry J, 1988. "Search Method Use by Unemployed Youth," Journal of Labor Economics, University of Chicago Press, vol. 6(1), pages 1-20, January.
  32. Gregg, Paul & Wadsworth, Jonathan, 1996. "How Effective Are State Employment Agencies? Jobcentre Use and Job Matching in Britain," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 58(3), pages 443-67, August.
  33. Bloemen, Hans G., 2001. "Job search, search intensity and labour market transitions : an empirical analysis," Serie Research Memoranda 0037, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
  34. Burdett, Kenneth & Ondrich, Jan I, 1985. "How Changes in Labor Demand Affect Unemployed Workers," Journal of Labor Economics, University of Chicago Press, vol. 3(1), pages 1-10, January.
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