IDEAS home Printed from https://ideas.repec.org/p/hal/cesptp/halshs-00824380.html
   My bibliography  Save this paper

Does the public employment service affect search effort and outcomes

Author

Listed:
  • Denis Fougère

    (CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - X - École polytechnique - ENSAE Paris - École Nationale de la Statistique et de l'Administration Économique - CNRS - Centre National de la Recherche Scientifique, CEPR - Center for Economic Policy Research - CEPR, IZA - Institute for the Study of Labor - IZA)

  • Jacqueline Pradel

    (EUREQUA - Equipe Universitaire de Recherche en Economie Quantitative - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

  • Muriel Roger

    (LEA - Laboratoire d'Economie Appliquée - INRA - Institut National de la Recherche Agronomique, PSE - Paris School of Economics - ENPC - École des Ponts ParisTech - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

Abstract

In this paper, we examine the disincentive effects of the public employment service on 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 variable costs of search in which unemployed workers select their optimal search intensity given the exogenous arrival rate of job contacts coming from the public employment agency. Because the theoretical effect of an increase in this exogenous job contact arrival rate on the structural exit rate from unemployment is ambiguous, we estimate this model using individual unemployment duration data. Our results show that the exit rate from unemployment increases with the arrival rate of job contacts obtained by 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 women and low-skilled adult unemployed workers. This last result suggests that a public employment agency that matches searchers and employers is beneficial, in the sense that it saves searchers in terms of search costs they would otherwise bear.

Suggested Citation

  • Denis Fougère & Jacqueline Pradel & Muriel Roger, 2009. "Does the public employment service affect search effort and outcomes," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00824380, HAL.
  • Handle: RePEc:hal:cesptp:halshs-00824380
    DOI: 10.1016/j.euroecorev.2009.01.006
    Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00824380
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Gerard J. van den Berg & Bas van der Klaauw, 2006. "Counseling And Monitoring Of Unemployed Workers: Theory And Evidence From A Controlled Social Experiment," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 47(3), pages 895-936, August.
    2. Pissarides, C A, 1979. "Job Matchings with State Employment Agencies and Random Search," Economic Journal, Royal Economic Society, vol. 89(356), pages 818-833, December.
    3. 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 478-498, July.
    4. Kenneth Burdett & Dale T. Mortensen, 1977. "Labor Supply Under Uncertainty," Discussion Papers 297, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    5. Hanemann, W Michael, 1984. "Discrete-Continuous Models of Consumer Demand," Econometrica, Econometric Society, vol. 52(3), pages 541-561, May.
    6. Benhabib, Jess & Bull, Clive, 1983. "Job Search: The Choice of Intensity," Journal of Political Economy, University of Chicago Press, vol. 91(5), pages 747-764, October.
    7. 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.
    8. van der Klaauw, Bas & van Vuuren, Aico & Berkhout, Peter, 2004. "Labor Market Prospects, Search Intensity and the Transition from College to Work," IZA Discussion Papers 1176, Institute of Labor Economics (IZA).
    9. 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 842-865, September.
    10. 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.
    11. Eckstein, Zvi & van den Berg, Gerard J., 2007. "Empirical labor search: A survey," Journal of Econometrics, Elsevier, vol. 136(2), pages 531-564, February.
    12. Miana Plesca, 2010. "A General Equilibrium Evaluation of the Employment Service," Journal of Human Capital, University of Chicago Press, vol. 4(3), pages 274-329.
    13. John T. Addison & Pedro Portugal, 2002. "Job search methods and outcomes," Oxford Economic Papers, Oxford University Press, vol. 54(3), pages 505-533, July.
    14. Brodaty, Thomas & Crépon, Bruno & Fougère, Denis, 2000. "Using Matching Estimators to Evaluate Alternative Youth Employment Programs: Evidence from France, 1986-1988," CEPR Discussion Papers 2604, C.E.P.R. Discussion Papers.
    15. Mortensen, D. T. & Vishwanath, T., 1995. "Personal contacts and earnings: It is who you know!," Labour Economics, Elsevier, vol. 2(1), pages 103-104, March.
    16. Wasmer, Etienne & Zenou, Yves, 2006. "Equilibrium search unemployment with explicit spatial frictions," Labour Economics, Elsevier, vol. 13(2), pages 143-165, April.
    17. 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 637-655, June.
    18. 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 443-467, August.
    19. Bloemen, H.G., 1994. "Job search, search intensity and labour market transitions : An empirical exercise," Other publications TiSEM f081991a-4b5c-472b-a115-9, Tilburg University, School of Economics and Management.
    20. Fougère, Denis & Pradel, Jacqueline & Roger, Muriel, 2005. "Does Job-Search Assistance Affect Search Effort and Outcomes? A Microeconometric Analysis of Public versus Private Search Methods," IZA Discussion Papers 1825, Institute of Labor Economics (IZA).
    21. Lancaster, Tony & Chesher, Andrew, 1983. "An Econometric Analysis of Reservation Wages," Econometrica, Econometric Society, vol. 51(6), pages 1661-1676, November.
    22. Fougere, Denis & Kramarz, Francis & Magnac, Thierry, 2000. "Youth employment policies in France," European Economic Review, Elsevier, vol. 44(4-6), pages 928-942, May.
    23. Gerard J. van den Berg, 1990. "Nonstationarity in Job Search Theory," Review of Economic Studies, Oxford University Press, vol. 57(2), pages 255-277.
    24. Stern, Steven, 1989. "Estimating a Simultaneous Search Model," Journal of Labor Economics, University of Chicago Press, vol. 7(3), pages 348-369, July.
    25. Boone, Jan & van Ours, Jan C, 2004. "Effective Active Labour Market Policies," CEPR Discussion Papers 4707, C.E.P.R. Discussion Papers.
    26. Peter B. Morgan, 1983. "Search and Optimal Sample Sizes," Review of Economic Studies, Oxford University Press, vol. 50(4), pages 659-675.
    27. Ashenfelter, Orley & Ashmore, David & Deschenes, Olivier, 2005. "Do unemployment insurance recipients actively seek work? Evidence from randomized trials in four U.S. States," Journal of Econometrics, Elsevier, vol. 125(1-2), pages 53-75.
    28. Bruce D. Meyer, 1995. "Lessons from the U.S. Unemployment Insurance Experiments," Journal of Economic Literature, American Economic Association, vol. 33(1), pages 91-131, March.
    29. Yoon, Bong Joon, 1981. "A Model of Unemployment Duration with Variable Search Intensity," The Review of Economics and Statistics, MIT Press, vol. 63(4), pages 599-609, November.
    30. Liliane Bonnal & Denis Fougère & Anne Sérandon, 1997. "Evaluating the Impact of French Employment Policies on Individual Labour Market Histories," Review of Economic Studies, Oxford University Press, vol. 64(4), pages 683-713.
    31. Wolpin, Kenneth I, 1987. "Estimating a Structural Search Model: The Transition from School to Work," Econometrica, Econometric Society, vol. 55(4), pages 801-817, July.
    32. Lindeboom, Maarten & van Ours, Jan C & Renes, Gusta, 1994. "Matching Employers and Workers: An Empirical Analysis on the Effectiveness of Search," Oxford Economic Papers, Oxford University Press, vol. 46(1), pages 45-67, January.
    33. 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.
    34. Wolpin, Kenneth I, 1992. "The Determinants of Black-White Differences in Early Employment Careers: Search, Layoffs, Quits, and Endogenous Wage Growth," Journal of Political Economy, University of Chicago Press, vol. 100(3), pages 535-560, June.
    35. 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.
    36. Barron, John M & Gilley, Otis W, 1981. "Job Search and Vacancy Contacts: Note," American Economic Review, American Economic Association, vol. 71(4), pages 747-752, September.
    37. Boone, J. & van Ours, J.C., 2004. "Effective Labor Market Policies," Discussion Paper 2004-87, Tilburg University, Center for Economic Research.
    38. 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.
    39. Osberg, Lars, 1993. "Fishing in Different Pools: Job Search Strategies and Job-Finding Success in Canada in the Early 1980s," Journal of Labor Economics, University of Chicago Press, vol. 11(2), pages 348-386, April.
    40. Gourieroux, Christian & Monfort, Alain, 1997. "Simulation-based Econometric Methods," OUP Catalogue, Oxford University Press, number 9780198774754.
    41. Flinn, C. & Heckman, J., 1982. "New methods for analyzing structural models of labor force dynamics," Journal of Econometrics, Elsevier, vol. 18(1), pages 115-168, January.
    42. Gal, Shmuel & Landsberger, Michael & Levykson, Benny, 1981. "A Compound Strategy for Search in the Labor Market," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 22(3), pages 597-608, October.
    43. Zenou, Yves, 2007. "High Relocation Costs in Search-Matching Models: Theory and Application to Spatial Mismatch," IZA Discussion Papers 2739, Institute of Labor Economics (IZA).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Denis Fougère & Jacqueline Pradel & Muriel Roger, 2005. "Does Job-Search Assistance Affect Search Effort and Outcomes ? A Microeconometric Analysis of Public Versus Private Search Methods," Working Papers 2005-33, Center for Research in Economics and Statistics.
    2. Andrea Weber & Helmut Mahringer, 2008. "Choice and success of job search methods," Empirical Economics, Springer, vol. 35(1), pages 153-178, August.
    3. Stefano DellaVigna & M. Daniele Paserman, 2005. "Job Search and Impatience," Journal of Labor Economics, University of Chicago Press, vol. 23(3), pages 527-588, July.
    4. Manning, Alan, 2009. "You can't always get what you want: The impact of the UK Jobseeker's Allowance," Labour Economics, Elsevier, vol. 16(3), pages 239-250, June.
    5. Ronald Bachmann & Daniel Baumgarten, 2013. "How do the unemployed search for a job? – Evidence from the EU Labour Force Survey," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-25, December.
    6. M. Daniele Paserman, 2008. "Job Search and Hyperbolic Discounting: Structural Estimation and Policy Evaluation," Economic Journal, Royal Economic Society, vol. 118(531), pages 1418-1452, August.
    7. Keane, Michael P. & Todd, Petra E. & Wolpin, Kenneth I., 2011. "The Structural Estimation of Behavioral Models: Discrete Choice Dynamic Programming Methods and Applications," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 4, pages 331-461, Elsevier.
    8. Rainer Eppel & Helmut Mahringer & Andrea Weber, 2014. "Job Search Behaviour and Job Search Success of the Unemployed," WIFO Working Papers 471, WIFO.
    9. 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.
    10. Bart Cockx & Muriel Dejemeppe & Andrey Launov & Bruno Van der Linden, 2018. "Imperfect Monitoring of Job Search: Structural Estimation and Policy Design," Journal of Labor Economics, University of Chicago Press, vol. 36(1), pages 75-120.
    11. Wahba, Jackline & Zenou, Yves, 2005. "Density, social networks and job search methods: Theory and application to Egypt," Journal of Development Economics, Elsevier, vol. 78(2), pages 443-473, December.
    12. Morescalchi Andrea & Paruolo Paolo, 2020. "Too Much Stick for the Carrot? Job Search Requirements and Search Behaviour of Unemployment Benefit Claimants," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 20(1), pages 1-21, January.
    13. Smirnova, Natalia, 2003. "Job search behavior of unemployed in Russia," BOFIT Discussion Papers 13/2003, Bank of Finland, Institute for Economies in Transition.
    14. Markova Kseniya & Roshchin Sergey, "undated". "Choice among Different Job Search Channels. The Evidence from Russian Labor Market," EERC Working Paper Series 04-05e, EERC Research Network, Russia and CIS.
    15. van den Berg, Gerard J, 1999. "Empirical Inference with Equilibrium Search Models of the Labour Market," Economic Journal, Royal Economic Society, vol. 109(456), pages 283-306, June.
    16. Eckstein, Zwi & van den Berg, Gerard J, 2003. "Empircial labor search models: A survey," Working Paper Series 2003:18, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    17. Andrea Morescalchi, 2021. "A new career in a new town. Job search methods and regional mobility of unemployed workers," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 20(2), pages 223-272, May.
    18. Michele Mosca & Francesco Pastore, 2009. "Wage Effects of Recruitment Methods: The Case of the Italian Social Service Sector," AIEL Series in Labour Economics, in: Marco Musella & Sergio Destefanis (ed.), Paid and Unpaid Labour in the Social Economy. An International Perspective, edition 1, chapter 8, pages 115-141, AIEL - Associazione Italiana Economisti del Lavoro.
    19. Andrea Morescalchi, 2016. "A new career in a new town. Job search methods and regional mobility of unemployed workers," ERSA conference papers ersa16p307, European Regional Science Association.
    20. Etienne Campens & Solenne Tanguy, 2005. "The market for job placement : a model of head-hunters," Cahiers de la Maison des Sciences Economiques v06027, Université Panthéon-Sorbonne (Paris 1).

    More about this item

    Keywords

    Job search; Search intensity; Public employment agency; Simulated maximum likelihood;
    All these keywords.

    JEL classification:

    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:cesptp:halshs-00824380. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://hal.archives-ouvertes.fr/ .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.