DP2986 Counselling and Monitoring of Unemployed Workers: Theory and Evidence from a Controlled Social Experiment

Author(s): Gerard van den Berg, Bas van der Klaauw
Publication Date: October 2001
Keyword(s): active labour market policy, multi-tasking, randomized social experiment, search channels, search effort, treatment, unemployment duration
JEL(s): J58, J64, J65
Programme Areas: Labour Economics
Link to this Page: www.cepr.org/active/publications/discussion_papers/dp.php?dpno=2986

We investigate the effect of counselling and monitoring on the individual employment transition rate. We theoretically analyse these policies in a job search model with two search channels and endogenous search effort. In the empirical analysis we use unique administrative and survey data concerning a social experiment with full randomization and compliance. The results show that counselling and monitoring do not affect the work exit rate. Monitoring causes a shift from informal to formal job searching. We combine our empirical results with the results from our theoretical analysis and the existing empirical literature to establish a comprehensive analysis of the effectiveness of these policies.