Abstract
Public employment service (PES) agencies and caseworkers (CWs) often have substantial leeway in the design and implementation of active labor market policies for the unemployed, and they use policies to a varying extent. We estimate regime effects which capture how CW and PES affect outcomes through different policy intensities. These operate potentially on all forward-looking job seekers regardless of actual treatment exposure. We consider regime effects for two sets of programs, supporting (“carrots”) and restricting (“sticks”) programs, and contrast regime and treatment effects on unemployment durations, employment, and post-unemployment earnings using register data that contain PES and caseworker identifiers for about 130,000 job spells. Regime effects are important: earnings are higher in a PES if carrot-type programs are used more intensively and stick-type programs are used less intensively. Actual treatment effects on earnings have a similar order of magnitude as regime effects and are positive for participation in carrot-type programs and negative for stick-type treatments. Regime effects are economically substantial. A modest increase in the intended usage of carrots and sticks reduces the total cost of an unemployed individual by up to 7.5%.
Original language | English |
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Pages (from-to) | 111-127 |
Number of pages | 17 |
Journal | Journal of Business and Economic Statistics |
Volume | 40 |
Issue number | 1 |
Early online date | 25 Jun 2020 |
DOIs | |
Publication status | Published - 3 Aug 2022 |
Funding
Rafael Lalive acknowledges the support by the National Center for Competence in Research LIVES.
Funders | Funder number |
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Caisse Centrale de Compensation | |
National Center for Competence in Research LIVES | |
Swiss Secretariat for Economic Affairs | |
Center for Agriculture, Food and the Environment, University of Massachusetts Amherst | |
Centre for Economic Policy Research | |
Rijksuniversiteit Groningen | |
Université de Lausanne | |
Institutet för arbetsmarknads- och utbildningspolitisk politisk utvärdering |
Keywords
- Active labor market programs
- Caseworkers
- Earnings
- Employment
- Policy regime
- Unemployment