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Imperfect Monitoring of Job Search: Structural Estimation and Policy Design

Listed author(s):
  • Cockx, Bart

    ()

    (Ghent University)

  • Dejemeppe, Muriel

    ()

    (Université catholique de Louvain)

  • Launov, Andrey

    ()

    (University of Kent)

  • Van der Linden, Bruno

    ()

    (IRES, Université catholique de Louvain)

We build and estimate a non-stationary structural job search model that incorporates the main stylized features of a typical job search monitoring scheme in unemployment insurance (UI) and acknowledges that search effort and requirements are measured imperfectly. Based on Belgian data, monitoring is found to affect search behavior only weakly, because (i) assessments were scheduled late and infrequently; (ii) the monitoring technology was not sufficiently precise, (iii) lenient Belgian UI results in caseloads that are less responsive to incentives than elsewhere. Simulations show how changing the aforementioned design features can enhance effectiveness and that precise monitoring is key in this.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 10487.

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Length: 36 pages
Date of creation: Jan 2017
Handle: RePEc:iza:izadps:dp10487
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