Private and Public Provision of Counseling to Job-Seekers: Evidence from a Large Controlled Experiment
Contracting out public services to private firms has ambiguous effects when quality is imperfectly observable. Using a randomized experiment over a national sample in France, we compare the efficiency of the public employment service (PES) vs. private providers in delivering very similar job-search intensive counseling. The impact of each program is assessed with respect to the standard, low intensity track offered by the PES to the unemployed. We find that job-search assistance increases exit rates to employment by 15 to 35%. But the impact of the public program is about twice as large as compared to the private program, at least during the 6 first months after random assignment. We argue that the observed contract structure with the private providers has not overcome the underlying agency problem. We find no evidence of cream-skimming: rather, it seems that profit maximizing private providers have found it optimal to enroll as many job-seekers as they could, but to make minimum effort on the placement of some of them.
|Date of creation:||Apr 2012|
|Date of revision:|
|Publication status:||published in: American Economic Journal: Applied Economics, 2014, 6 (4), 142-174|
|Contact details of provider:|| Postal: |
Phone: +49 228 3894 223
Fax: +49 228 3894 180
Web page: http://www.iza.org
|Order Information:|| Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Card, David & Kluve, Jochen & Weber, Andrea, 2009.
"Active Labor Market Policy Evaluations: A Meta-Analysis,"
IZA Discussion Papers
4002, Institute for the Study of Labor (IZA).
- David Card & Jochen Kluve & Andrea Weber, 2010. "Active Labour Market Policy Evaluations: A Meta-Analysis," Economic Journal, Royal Economic Society, vol. 120(548), pages F452-F477, November.
- David E. Card & Jochen Kluve & Andrea Weber, 2009. "Active Labor Market Policy Evaluations: A Meta-analysis," NRN working papers 2009-02, The Austrian Center for Labor Economics and the Analysis of the Welfare State, Johannes Kepler University Linz, Austria.
- David Card & Jochen Kluve & Andrea Weber, 2010. "Active Labor Market Policy Evaluations: A Meta-Analysis," NBER Working Papers 16173, National Bureau of Economic Research, Inc.
- David Card & Jochen Kluve & Andrea Weber, 2009. "Active Labor Market Policy Evaluations: A Meta-analysis," CESifo Working Paper Series 2570, CESifo Group Munich.
- David Card & Jochen Kluve & Andrea Weber, 2009. "Active Labor Market Policy Evaluations – A Meta-analysis," Ruhr Economic Papers 0086, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
- Ashenfelter, Orley & Ashmore, David & Deschenes, Olivier, 2000.
"Do Unemployment Insurance Recipients Actively Seek Work? Evidence From Randomized Trials in Four U.S. States,"
IZA Discussion Papers
128, Institute for the Study of Labor (IZA).
- Ashenfelter, Orley & Ashmore, David & Deschenes, Olivier, 2005. "Do unemployment insurance recipients actively seek work? Evidence from randomized trials in four U.S. States," Journal of Econometrics, Elsevier, vol. 125(1-2), pages 53-75.
- James J. Heckman & Carolyn Heinrich & Jeffrey Smith, 2002.
"The Performance of Performance Standards,"
Journal of Human Resources,
University of Wisconsin Press, vol. 37(4), pages 778-811.
- Heckman, James J. & Heinrich, Carolyn J. & Smith, Jeffrey A., 2002. "The Performance of Performance Standards," IZA Discussion Papers 525, Institute for the Study of Labor (IZA).
- James Heckman & Carolyn Heinrich & Jeffrey Smith, 2002. "The Performance of Performance Standards," NBER Working Papers 9002, National Bureau of Economic Research, Inc.
- Richard Blundell & Monica Costa Dias & Costas Meghir & John Van Reenen, 2004.
"Evaluating the Employment Impact of a Mandatory Job Search Program,"
Journal of the European Economic Association,
MIT Press, vol. 2(4), pages 569-606, 06.
- Blundell, Richard William & Costa Dias, Monica & Meghir, Costas & Van Reenen, John, 2003. "Evaluating the Employment Impact of a Mandatory Job Search Programme," CEPR Discussion Papers 3786, C.E.P.R. Discussion Papers.
- Koning, Pierre & Heinrich, Carolyn J., 2010.
"Cream-Skimming, Parking and Other Intended and Unintended Effects of Performance-Based Contracting in Social Welfare Services,"
IZA Discussion Papers
4801, Institute for the Study of Labor (IZA).
- Pierre Koning & C.J. Heinrich, 2009. "Cream-skimming, parking and other intended and unintended effects of performance-based contracting in social welfare services," CPB Discussion Paper 134, CPB Netherlands Bureau for Economic Policy Analysis.
- Bennmarker, Helge & Grönqvist, Erik & Öckert, Björn, 2009. "Effects of outsourcing employment services: evidence from a randomized experiment," Working Paper Series 2009:23, IFAU - Institute for Evaluation of Labour Market and Education Policy.
- Jens Lundsgaard, 2002. "Competition and Efficiency in Publicly Funded Services," OECD Economics Department Working Papers 331, OECD Publishing.
When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp6518. 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: (Mark Fallak)
If references are entirely missing, you can add them using this form.