Discussion Paper Details

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Title: Structural Empirical Evaluation of Job Search Monitoring

Author(s): Gerard van den Berg and Bas van der Klaauw

Publication Date: November 2013

Keyword(s): active labor market policy, job duration, job mobility, multi-tasking, randomized social expe`riment., search channels, search effort, treatment, unemployment duration and wage

Programme Area(s): Labour Economics

Abstract: 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 over-all benefits reduction in a way that is neutral to the worker results in slightly smaller effects with lower administrative costs.

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Bibliographic Reference

van den Berg, G and van der Klaauw, B. 2013. 'Structural Empirical Evaluation of Job Search Monitoring'. London, Centre for Economic Policy Research.