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Are Public or Private Providers of Employment Services More Effective? Evidence from a Randomized Experiment

Listed author(s):
  • Rehwald, Kai

    ()

    (Aarhus University)

  • Rosholm, Michael

    ()

    (Aarhus University)

  • Svarer, Michael

    ()

    (Aarhus University)

This paper compares the effectiveness of public and private providers of employment services. Reporting from a randomized field experiment conducted in Denmark we assess empirically the case for contracting out employment services for a well-defined group of highly educated job-seekers (unemployed holding a university degree). Our findings suggest, first, that private providers deliver more intense, employment-oriented, and earlier services. Second, public and private provision of employment services are equally effective regarding subsequent labour market outcomes. And third, the two competing service delivery systems appear to be equally costly from a public spending perspective.

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File URL: http://ftp.iza.org/dp9365.pdf
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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 9365.

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Length: 43 pages
Date of creation: Sep 2015
Handle: RePEc:iza:izadps:dp9365
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  1. Bennmarker, Helge & Grönqvist, Erik & Öckert, Björn, 2013. "Effects of contracting out employment services: Evidence from a randomized experiment," Journal of Public Economics, Elsevier, vol. 98(C), pages 68-84.
  2. Luc Behaghel & Bruno Cr?pon & Marc Gurgand, 2014. "Private and Public Provision of Counseling to Job Seekers: Evidence from a Large Controlled Experiment," American Economic Journal: Applied Economics, American Economic Association, vol. 6(4), pages 142-174, October.
  3. David Card & Jochen Kluve & Andrea Weber, 2010. "Active Labour Market Policy Evaluations: A Meta-Analysis," Economic Journal, Royal Economic Society, vol. 120(548), pages 452-477, November.
  4. Bart Cockx & Stijn Baert, 2015. "Contracting Out Mandatory Counselling and Training for Long-Term Unemployed. Private For-Profit or Non-Profit, or Keep it Public?," CESifo Working Paper Series 5587, CESifo Group Munich.
  5. Laun, Lisa & Thoursie, Peter Skogman, 2014. "Does privatisation of vocational rehabilitation improve labour market opportunities? Evidence from a field experiment in Sweden," Journal of Health Economics, Elsevier, vol. 34(C), pages 59-72.
  6. Zweifel, Peter & Zaborowski, Christoph, 1996. "Employment Service: Public or Private?," Public Choice, Springer, vol. 89(1-2), pages 131-162, October.
  7. Heckman, James J. & Lalonde, Robert J. & Smith, Jeffrey A., 1999. "The economics and econometrics of active labor market programs," Handbook of Labor Economics,in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 31, pages 1865-2097 Elsevier.
  8. George J. Carcagno & James C. Ohls, 1982. "Using Private Employment Agencies to Place Public Assistance Clients in Jobs," Journal of Human Resources, University of Wisconsin Press, vol. 17(1), pages 132-143.
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