To evaluate search effort monitoring of unemployed workers, it is important to take account of post-unemployment wages and job-to-job mobility. We structurally estimate a model with search channels, using a controlled trial in which monitoring is randomized. The data include registers and survey data on search behavior. We find that the opportunity to move to better-paid jobs in employment reduces the extent to which monitoring induces substitution toward formal search channels in unemployment. Job mobility compensates for adverse long-run effects of monitoring on wages. We examine counterfactual policies against moral hazard, like reemployment bonuses and changes of the benefits path.
|Number of pages||25|
|Journal||International Economic Review|
|Early online date||18 Oct 2018|
|Publication status||Published - May 2019|