The effectiveness of Public Employment Service workers in the Netherlands

In this paper, we measure the effectiveness of the Dutch Public Employment Service (PES) workers for various performance indicators. Using unique administrative monthly data from local PES offices during 2004, we exploit the fact that the number of PES workers per job seeker varies substantially between offices and over time. We find additional PES workers to significantly increase outflow rates for short term unemployed (i.e. the first half year of unemployment), whereas no effects are obtained for the outflow rates of long term unemployed. PES workers are also found to reduce the inflow into the schemes and to increase the number of vacancies that are registered by offices. Although the effectiveness of PES workers is limited, we conclude that changes in the number of PES workers per client are cost-effective - that is, the extra costs are compensated for by the resulting reduction in benefit expenses.