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Structural Empirical Evaluation of Job Search Monitoring

  • van den Berg, Gerard J.

    ()

    (University of Bristol)

  • van der Klaauw, Bas

    ()

    (Vrije Universiteit 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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  1. Eckstein, Zvi & van den Berg, Gerard J, 2004. "Empirical Labour Search: A Survey," CEPR Discussion Papers 4199, C.E.P.R. Discussion Papers.
  2. Bart Cockx & Muriel Dejemeppe & Andrey Launov & Bruno Van der Linden, 2011. "Monitoring, Sanctions and Front-Loading of Job Search in a Non-Stationary Model," Working Papers 1114, Gutenberg School of Management and Economics, Johannes Gutenberg-Universität Mainz, revised 21 Nov 2011.
  3. Conny Wunsch, 2009. "Optimal Use of Labor Market Policies: The Role of Job Search Assistance," CESifo Working Paper Series 2890, CESifo Group Munich.
  4. Ridder, Geert & van den Berg, Gerard J., 2003. "Measuring Labor Market Frictions: A Cross-Country Comparison," IZA Discussion Papers 814, Institute for the Study of Labor (IZA).
  5. Acemoglu, Daron & Shimer, Robert, 2000. "Productivity gains from unemployment insurance," European Economic Review, Elsevier, vol. 44(7), pages 1195-1224, June.
  6. Fougère, Denis & Pradel, Jacqueline & Roger, Muriel, 2005. "Does Job-Search Assistance Affect Search Effort and Outcomes? A Microeconometric Analysis of Public versus Private Search Methods," IZA Discussion Papers 1825, Institute for the Study of Labor (IZA).
  7. David Card & Dean R. Hyslop, 2004. "Estimating the Effects of a Time Limited Earnings Subsidy for Welfare Leavers," NBER Working Papers 10647, National Bureau of Economic Research, Inc.
  8. Gerard J. van den Berg & Bas van der Klaauw, 2006. "Counseling And Monitoring Of Unemployed Workers: Theory And Evidence From A Controlled Social Experiment," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 47(3), pages 895-936, 08.
  9. Dolton, Peter & O'Neill, Donal, 1996. "Unemployment Duration and the Restart Effect: Some Experimental Evidence," Economic Journal, Royal Economic Society, vol. 106(435), pages 387-400, March.
  10. John Micklewright & Gyula Nagy, 2009. "The effect of monitoring unemployment insurance recipients on unemployment duration: evidence from a field experiment," DoQSS Working Papers 09-02, Department of Quantitative Social Science - UCL Institute of Education, University College London.
  11. Pieter A. Gautier & Paul Muller & Bas van der Klaauw & Michael Rosholm & Michael Svarer, 2015. "Estimating Equilibrium Effects of Job Search Assistance," CESifo Working Paper Series 5476, CESifo Group Munich.
  12. Gerard J. van den Berg & Bas van der Klaauw & Jan C. van Ours, 2004. "Punitive Sanctions and the Transition Rate from Welfare to Work," Journal of Labor Economics, University of Chicago Press, vol. 22(1), pages 211-241, January.
  13. Daniel H. Klepinger & Terry R. Johnson & Jutta M. Joesch, 2002. "Effects of Unemployment Insurance Work-Search Requirements: The Maryland Experiment," ILR Review, Cornell University, ILR School, vol. 56(1), pages 3-22, October.
  14. 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.
  15. Terry R. Johnson & Daniel H. Klepinger, 1994. "Experimental Evidence on Unemployment Insurance Work-Search Policies," Journal of Human Resources, University of Wisconsin Press, vol. 29(3), pages 665-717.
  16. Jeremy Lise & Shannon Seitz & Jeffrey Smith, 2003. "Equilibrium Policy Experiments and the Evaluation of Social Programs," University of Western Ontario, Centre for Human Capital and Productivity (CHCP) Working Papers 20032, University of Western Ontario, Centre for Human Capital and Productivity (CHCP).
  17. Nicola Pavoni & G. L. Violante, 2007. "Optimal Welfare-to-Work Programs," Review of Economic Studies, Oxford University Press, vol. 74(1), pages 283-318.
  18. McVicar, Duncan, 2008. "Job search monitoring intensity, unemployment exit and job entry: Quasi-experimental evidence from the UK," Labour Economics, Elsevier, vol. 15(6), pages 1451-1468, December.
  19. Flinn, C. & Heckman, J., 1982. "New methods for analyzing structural models of labor force dynamics," Journal of Econometrics, Elsevier, vol. 18(1), pages 115-168, January.
  20. Peter Dolton & Donal O'Neill, 2002. "The Long-Run Effects of Unemployment Monitoring and Work-Search Programs: Experimental Evidence from the United Kingdom," Journal of Labor Economics, University of Chicago Press, vol. 20(2), pages 381-403, Part.
  21. Cees Gorter & Guyonne R. J. Kalb, 1996. "Estimating the Effect of Counseling and Monitoring the Unemployed Using a Job Search Model," Journal of Human Resources, University of Wisconsin Press, vol. 31(3), pages 590-610.
  22. Ham, John C & LaLonde, Robert J, 1996. "The Effect of Sample Selection and Initial Conditions in Duration Models: Evidence from Experimental Data on Training," Econometrica, Econometric Society, vol. 64(1), pages 175-205, January.
  23. Hopenhayn, Hugo A & Nicolini, Juan Pablo, 1997. "Optimal Unemployment Insurance," Journal of Political Economy, University of Chicago Press, vol. 105(2), pages 412-38, April.
  24. Bruce D. Meyer, 1995. "Lessons from the U.S. Unemployment Insurance Experiments," Journal of Economic Literature, American Economic Association, vol. 33(1), pages 91-131, March.
  25. 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.
  26. Manning, Alan, 2009. "You can't always get what you want: The impact of the UK Jobseeker's Allowance," Labour Economics, Elsevier, vol. 16(3), pages 239-250, June.
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