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Carrots without Sticks: The Impacts of Job Search Assistance in a Regime with Minimal Monitoring and Sanctions

  • McGuinness, Seamus
  • O'Connell, Philip J.
  • Kelly, Elish

This paper uses a high quality longitudinal dataset to assess the impact of an active labour market intervention consisting of referral for interview plus Job Search Assistance (JSA) with the public employment service in Ireland during a period when both job search monitoring and sanctions were virtually non-existent. The results indicate that, relative to a control group with no intervention, unemployed individuals that were exposed to the interview letter and participated in JSA were 16 per cent less likely to have exited to employment prior to 12 months. The negative effects of the intervention approximately doubled when those that received a referral letter but did not attend a JSA interview were removed from the data. The results held when tested against the underlying assumptions of the model, and the influences of both sample selection and unobserved heterogeneity bias. The negative treatment impact is attributed to individuals lowering their job search intensity on learning, through the JSA activation interview, of the lax nature of the activation process. The research, which is unusual in the international literature in allowing the assessment of the impact of job search assistance in the virtual absence of monitoring and sanctions, highlights the need for effective monitoring and sanctions as integral components of labour market activation programmes.

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Paper provided by Economic and Social Research Institute (ESRI) in its series Papers with number WP409.

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Date of creation: Sep 2011
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Handle: RePEc:esr:wpaper:wp409
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  1. Jaap H. Abbring & Gerard J. Berg & Jan C. Ours, 2005. "The Effect of Unemployment Insurance Sanctions on the Transition Rate from Unemployment to Employment," Economic Journal, Royal Economic Society, vol. 115(505), pages 602-630, 07.
  2. Cockx, Bart & Dejemeppe, Muriel, 2007. "Is the Notification of Monitoring a Threat to the Unemployed? A Regression Discontinuity Approach," IZA Discussion Papers 2854, Institute for the Study of Labor (IZA).
  3. Knut Røed & Oddbjørn Raaum, 2006. "Do Labour Market Programmes Speed up the Return to Work?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 68(5), pages 541-568, October.
  4. O'Connell, Philip J. & McGuinness, Seamus & Kelly, Elish & Walsh, John R., 2009. "National Profiling of the Unemployed in Ireland," Research Series, Economic and Social Research Institute (ESRI), number RS10.
  5. James J. Heckman & Edward Vytlacil, 2005. "Structural Equations, Treatment Effects and Econometric Policy Evaluation," NBER Working Papers 11259, National Bureau of Economic Research, Inc.
  6. Denis Conniffe & Vanessa Gash & Philip J. O'Connell, 2000. "Evaluating State Programmes - “Natural Experiments” and Propensity Scores," The Economic and Social Review, Economic and Social Studies, vol. 31(4), pages 283-308.
  7. Kirby, Simon & Riley, Rebecca, 2004. "Compulsory work-focused interviews for inactive benefit claimants: an evaluation of the British ONE pilots," Labour Economics, Elsevier, vol. 11(4), pages 415-429, August.
  8. Gerfin, Michael & Lechner, Michael, 2000. "Microeconometric Evaluation of the Active Labour Market Policy in Switzerland," IZA Discussion Papers 154, Institute for the Study of Labor (IZA).
  9. Blundell, Richard William & Costa Dias, Monica & Meghir, Costas & Van Reenen, John, 2003. "Evaluating the Employment Impact of a Mandatory Job Search Programme," CEPR Discussion Papers 3786, C.E.P.R. Discussion Papers.
  10. Jespersen, Svend T. & Munch, Jakob R. & Skipper, Lars, 2008. "Costs and benefits of Danish active labour market programmes," Labour Economics, Elsevier, vol. 15(5), pages 859-884, October.
  11. John P Martin, 1998. "What Works Among Active Labour Market Policies: Evidence from OECD Countries' Experiences," RBA Annual Conference Volume, in: Guy Debelle & Jeff Borland (ed.), Unemployment and the Australian Labour Market Reserve Bank of Australia.
  12. Breunig, Robert & Cobb-Clark, Deborah A. & Dunlop, Yvonne & Terrill, Marion, 2002. "Assisting the Long-Term Unemployed: Results from a Randomized Trial," IZA Discussion Papers 628, Institute for the Study of Labor (IZA).
  13. Svarer, Michael, 2007. "The Effect of Sanctions on the Job Finding Rate: Evidence from Denmark," IZA Discussion Papers 3015, Institute for the Study of Labor (IZA).
  14. Eichhorst, Werner & Konle-Seidl, Regina, 2008. "Contingent Convergence: A Comparative Analysis of Activation Policies," IZA Discussion Papers 3905, Institute for the Study of Labor (IZA).
  15. Nicola Duell & David Grubb & Shruti Singh, 2009. "Activation Policies in Finland," OECD Social, Employment and Migration Working Papers 98, OECD Publishing.
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