IDEAS home Printed from https://ideas.repec.org/p/hhs/ifauwp/2017_001.html
   My bibliography  Save this paper

The role of sickness in the evaluation of job search assistance and sanctions

Author

Listed:
  • van den Berg, Gerard J.

    () (University of Bristol, IFAU Uppsala, IZA, ZEW, CEPR)

  • Hofmann, Barbara

    (University of Mannheim, IAB Nuremberg)

  • Uhlendorff, Arne

    (CNRS, CREST, IAB Nuremberg, DIW, IZA)

Abstract

Unemployment insurance agencies may combat moral hazard by punishing refusals to apply to assigned vacancies. However, the possibility to report sick creates an additional moral hazard, since during sickness spells, minimum requirements on search behavior do not apply. This reduces the ex ante threat of sanctions. Based on a large inflow sample into unemployment of male job seekers in West Germany in the year 2000, we analyze the effects of vacancy referrals and sanctions on the unemployment duration and the quality of job matches, in conjunction with the possibility to report sick. We estimate multispell duration models with selection on unobserved characteristics. We find that a vacancy referral increases the transition rate into work and that such accepted jobs go along with lower wages. We also find a positive effect of a vacancy referral on the probability of reporting sick. This effect is smaller at high durations, which suggests that the relative attractiveness of vacancy referrals increases over the time spent in unemployment. In our setting, with relatively severe sanctions, around 9 percent of sickness absence during unemployment is induced by vacancy referrals.

Suggested Citation

  • van den Berg, Gerard J. & Hofmann, Barbara & Uhlendorff, Arne, 2017. "The role of sickness in the evaluation of job search assistance and sanctions," Working Paper Series 2017:1, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  • Handle: RePEc:hhs:ifauwp:2017_001
    as

    Download full text from publisher

    File URL: http://www.ifau.se/globalassets/pdf/se/2017/wp2017-01-the-role-of-sickness-in-the-evaluation-of-job-search-assistance-and-sanctions.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Bruno Crépon & Esther Duflo & Marc Gurgand & Roland Rathelot & Philippe Zamora, 2013. "Do Labor Market Policies have Displacement Effects? Evidence from a Clustered Randomized Experiment," The Quarterly Journal of Economics, Oxford University Press, vol. 128(2), pages 531-580.
    2. Per Engström & Patrik Hesselius & Bertil Holmlund, 2012. "Vacancy Referrals, Job Search, and the Duration of Unemployment: A Randomized Experiment," LABOUR, CEIS, vol. 26(4), pages 419-435, December.
    3. Murray Aitkin, 1999. "A General Maximum Likelihood Analysis of Variance Components in Generalized Linear Models," Biometrics, The International Biometric Society, vol. 55(1), pages 117-128, March.
    4. Gerard J. Berg & Johan Vikström, 2014. "Monitoring Job Offer Decisions, Punishments, Exit to Work, and Job Quality," Scandinavian Journal of Economics, Wiley Blackwell, vol. 116(2), pages 284-334, April.
    5. Marco Caliendo & Konstantinos Tatsiramos & Arne Uhlendorff, 2013. "Benefit Duration, Unemployment Duration And Job Match Quality: A Regression‐Discontinuity Approach," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 28(4), pages 604-627, June.
    6. Ziebarth, Nicolas R. & Karlsson, Martin, 2010. "A natural experiment on sick pay cuts, sickness absence, and labor costs," Journal of Public Economics, Elsevier, vol. 94(11-12), pages 1108-1122, December.
    7. Barbara Hofmann, 2014. "Sick of being “Activated?”," Empirical Economics, Springer, vol. 47(3), pages 1103-1127, November.
    8. Ham, John C & LaLonde, Robert J, 1996. "The Effect of Sample Selection and Initial Conditions in Duration Models: Evidence from Experimental Data on Training," Econometrica, Econometric Society, vol. 64(1), pages 175-205, January.
    9. Pierre Koning & Daniel van Vuuren, 2010. "Disability insurance and unemployment insurance as substitute pathways," Applied Economics, Taylor & Francis Journals, vol. 42(5), pages 575-588.
    10. Caroline Hall & Laura Hartman, 2010. "Moral hazard among the sick and unemployed: evidence from a Swedish social insurance reform," Empirical Economics, Springer, vol. 39(1), pages 27-50, August.
    11. Anders Skrondal & Sophia Rabe-Hesketh, 2009. "Prediction in multilevel generalized linear models," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 172(3), pages 659-687.
    12. Abbring, Jaap H. & Heckman, James J., 2007. "Econometric Evaluation of Social Programs, Part III: Distributional Treatment Effects, Dynamic Treatment Effects, Dynamic Discrete Choice, and General Equilibrium Policy Evaluation," Handbook of Econometrics,in: J.J. Heckman & E.E. Leamer (ed.), Handbook of Econometrics, edition 1, volume 6, chapter 72 Elsevier.
    13. Henningsen, Morten, 2008. "Benefit shifting: The case of sickness insurance for the unemployed," Labour Economics, Elsevier, vol. 15(6), pages 1238-1269, December.
    14. Gaure, Simen & Roed, Knut & Zhang, Tao, 2007. "Time and causality: A Monte Carlo assessment of the timing-of-events approach," Journal of Econometrics, Elsevier, vol. 141(2), pages 1159-1195, December.
    15. Eichhorst, Werner & Grienberger-Zingerle, Maria & Konle-Seidl, Regina, 2006. "Activation Policies in Germany: From Status Protection to Basic Income Support," IZA Discussion Papers 2514, Institute for the Study of Labor (IZA).
    16. Laura Larsson, 2006. "Sick of Being Unemployed? Interactions between Unemployment and Sickness Insurance," Scandinavian Journal of Economics, Wiley Blackwell, vol. 108(1), pages 97-113, March.
    17. Jaap H. Abbring & Gerard J. van den Berg, 2003. "The Nonparametric Identification of Treatment Effects in Duration Models," Econometrica, Econometric Society, vol. 71(5), pages 1491-1517, September.
    18. Markussen, Simen & Røed, Knut & Røgeberg, Ole J., 2013. "The Changing of the Guards: Can Physicians Contain Social Insurance Costs?," IZA Discussion Papers 7122, Institute for the Study of Labor (IZA).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Van Belle, Eva & Caers, Ralf & De Couck, Marijke & Di Stasio, Valentina & Baert, Stijn, 2018. "The Signal of Applying for a Job under a Vacancy Referral Scheme," IZA Discussion Papers 11577, Institute for the Study of Labor (IZA).

    More about this item

    Keywords

    unemployment; vacancy referrals; physician; wage; unemployment Insurance; monitoring; moral hazard;

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • 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
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:hhs:ifauwp:2017_001. 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: (Ali Ghooloo). General contact details of provider: http://edirc.repec.org/data/ifagvse.html .

    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 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.

    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.