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Structural Empirical Evaluation of Job Search Monitoring

  • van den Berg, Gerard J.

    ()

    (University of Mannheim)

  • van der Klaauw, Bas

    ()

    (VU University Amsterdam)

We structurally estimate a novel job search model with endogenous job search effort, job quality dispersion, and effort monitoring, taking into account that monitoring effects may be mitigated by on-the-job search and search channel substitution. The data are from a randomized experiment conducted in the Netherlands. They include registers of post-unemployment outcomes like wages and job mobility, and survey data on measures of search behavior. As such we are the first to study monitoring effects on post-unemployment outcomes. We find that the option to climb the job ladder reduces substitution between search channels during unemployment and compensates for adverse long-run effects of monitoring on wages. We use the structural estimates to compare monitoring to counterfactual policies against moral hazard, like re-employment bonuses and changes in the unemployment benefits path. Replacing monitoring by an overall benefits reduction in a way that is neutral to the worker results in slightly smaller effects with lower administrative costs.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 7740.

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Length: 41 pages
Date of creation: Nov 2013
Date of revision:
Handle: RePEc:iza:izadps:dp7740
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  20. Jaap H. Abbring & Gerard J. Berg & Jan C. Ours, 2005. "The Effect of Unemployment Insurance Sanctions on the Transition Rate from Unemployment to Employment," Economic Journal, Royal Economic Society, vol. 115(505), pages 602-630, 07.
  21. Keeley, Michael C & Robins, Philip K, 1985. "Government Programs, Job Search Requirements, and the Duration of Unemployment," Journal of Labor Economics, University of Chicago Press, vol. 3(3), pages 337-62, July.
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