Strictness in the Evaluation of Job Search Effort and Employment Outcomes

Unemployed job seekers must comply with job-search requirements to be eligible for unemployment insurance benefits. We exploit variation in strictness across caseworkers who conduct monthly reviews of these requirements to examine the effects of stricter monitoring on job search behavior and labor market outcomes. This variation arises from central-office caseworkers who are quasi-randomly assigned to review job seekers’ activity reports and whose only interaction with job seekers occurs through this process. We find that stricter monitoring increases the likelihood of reported violations and benefit sanctions, leading to persistently higher job-search intensity, shorter unemployment durations, and higher employment rates. We find no evidence of negative effects on job quality, as measured by subsequent earnings and wages in the first job. The positive employment effects are more persistent among job seekers from low-growth industries and those with weak labor market attachment.