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Imperfect Monitoring of Job Search: Structural Estimation and Policy Design

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  • Cockx, Bart

    (Ghent University)

  • Dejemeppe, Muriel

    (Université catholique de Louvain)

  • Launov, Andrey

    (University of Kent)

  • Van der Linden, Bruno

    (IRES, Université catholique de Louvain)

Abstract

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.

Suggested Citation

  • Cockx, Bart & Dejemeppe, Muriel & Launov, Andrey & Van der Linden, Bruno, 2017. "Imperfect Monitoring of Job Search: Structural Estimation and Policy Design," IZA Discussion Papers 10487, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp10487
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    2. Marios Michaelides & Peter Mueser, 2020. "The Labor Market Effects of US Reemployment Policy: Lessons from an Analysis of Four Programs during the Great Recession," Journal of Labor Economics, University of Chicago Press, vol. 38(4), pages 1099-1140.
    3. Mesén Vargas, Juliana & Van der Linden, Bruno, 2017. "Is There Always a Trade-off between Insurance and Incentives? The Case of Unemployment with Subsistence Constraints," IZA Discussion Papers 11034, Institute of Labor Economics (IZA).
    4. Cockx, Bart & Declercq, Koen & Dejemeppe, Muriel & Inga, Leda & Van der Linden, Bruno, 2020. "Switching from an inclining to a zero-level unemployment benefit profile: Good for work incentives?," Labour Economics, Elsevier, vol. 64(C).
    5. Amelie Schiprowski, 2020. "The Role of Caseworkers in Unemployment Insurance: Evidence from Unplanned Absences," Journal of Labor Economics, University of Chicago Press, vol. 38(4), pages 1189-1225.
    6. Malory Rennoir & Ilan Tojerow, 2019. "Évaluation de l’ensemble du dispositif de contrôle de la disponibilité des chômeurs, tel que mis en œuvre au sein du Forem," ULB Institutional Repository 2013/292150, ULB -- Universite Libre de Bruxelles.
    7. De Groote, Olivier, 2019. "A dynamic model of effort choice in high school," TSE Working Papers 19-1002, Toulouse School of Economics (TSE), revised Jun 2020.
    8. Dayanand S. Manoli & Marios Michaelides & Ankur Patel, 2018. "Long-Term Effects of Job-Search Assistance: Experimental Evidence Using Administrative Tax Data," NBER Working Papers 24422, National Bureau of Economic Research, Inc.
    9. Bruno Decreuse & Guillaume Wilemme, 2019. "Age Discontinuity and Nonemployment Benefit Policy Evaluation through the Lens of Job Search Theory," Working Papers halshs-02072800, HAL.
    10. De Brouwer, Octave & Leduc, Elisabeth & Tojerow, Ilan, 2019. "The Unexpected Consequences of Job Search Monitoring: Disability Instead of Employment?," IZA Discussion Papers 12304, Institute of Labor Economics (IZA).
    11. Lichter, Andreas & Schiprowski, Amelie, 2021. "Benefit duration, job search behavior and re-employment," Journal of Public Economics, Elsevier, vol. 193(C).
    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. Lombardi, Stefano, 2019. "Threat effects of monitoring and unemployment insurance sanctions: evidence from two reforms," Working Paper Series 2019:22, IFAU - Institute for Evaluation of Labour Market and Education Policy.

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    More about this item

    Keywords

    unemployment benefits; non-stationary job search; sanctions; monitoring; structural estimation;
    All these keywords.

    JEL classification:

    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy
    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies

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