DP15038 Reciprocity and the Interaction Between the Unemployed and the Caseworker

Author(s): Iris Kesternich, Gerrit Mueller, Bettina Siflinger, Gerard van den Berg
Publication Date: July 2020
Keyword(s): Active Labor Market Policy, behavioral response, job search, Monitoring, welfare
JEL(s): D91, I38, J64
Programme Areas: Labour Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=15038

We investigate how negatively reciprocal traits of unemployed individuals interact with "sticks" policies imposing constraints on individual job search effort, in the context of the German welfare system. For this we merge survey data of long-term unemployed individuals, containing indicators of reciprocity as a personality trait, to unique register data on all unemployed coached by the same team of caseworkers and their treatments. We find that the combination of a high negative reciprocity and a strict regime has a negative interaction effect on search effort. The results are stronger for males than for females. Strict regimes may thus drive long-term unemployed males with certain types of social preferences further away from the labor market.