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Structural empirical evaluation of job search monitoring

Author

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  • van den Berg, Gerar J.

    () (IFAU - Institute for Evaluation of Labour Market and Education Policy)

  • van der Klaauw, Bas

    (Department of Economics, University of Amsterdam)

Abstract

To evaluate search effort monitoring of unemployed workers, it is important to take account of post-unemployment wages and job-to-job mobility. We structurally estimate a job search model with endogenous job search effort by the unemployed along various search channels that deals with this. The data are from an experiment in the Netherlands in which the extent of monitoring is randomized. They include registers of post-unemployment outcomes like wages and job mobility, and survey data on measures of search behavior. As such we are the first to study monitoring effects on post-unemployment outcomes. Once employed, individuals have the opportunity to further improve their position by moving to better-paid jobs, and we find that this reduces the extent to which monitoring induces substitution towards formal search channels in unemployment. In general, job mobility compensates for adverse long-run effects of monitoring on wages. We use the structural estimates to compare monitoring to counterfactual policies against moral hazard, like re-employment bonuses and changes in the unemployment benefits path. Replacing monitoring by an over-all benefits reduction in a way that is neutral to the worker results in slightly smaller effects with lower administrative costs.

Suggested Citation

  • van den Berg, Gerar J. & van der Klaauw, Bas, 2015. "Structural empirical evaluation of job search monitoring," Working Paper Series 2015:16, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  • Handle: RePEc:hhs:ifauwp:2015_016
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    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.
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    Cited by:

    1. Lachowska, Marta & Meral, Merve & Woodbury, Stephen A., 2016. "Effects of the unemployment insurance work test on long-term employment outcomes," Labour Economics, Elsevier, vol. 41(C), pages 246-265.

    More about this item

    Keywords

    Unemployment duration; search effort; active labor market policy; wage; job duration; job mobility; treatment; search channels; multi-tasking; randomized social experiment;

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand

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