TY - JOUR
T1 - Treatment Versus Regime Effects of Carrots and Sticks
AU - Arni, Patrick
AU - van den Berg, Gerard J.
AU - Lalive, Rafael
PY - 2022/8/3
Y1 - 2022/8/3
N2 - 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%.
AB - 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%.
KW - Active labor market programs
KW - Caseworkers
KW - Earnings
KW - Employment
KW - Policy regime
KW - Unemployment
UR - http://www.scopus.com/inward/record.url?scp=85088927117&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=85088927117&partnerID=8YFLogxK
U2 - 10.1080/07350015.2020.1784744
DO - 10.1080/07350015.2020.1784744
M3 - Article
AN - SCOPUS:85088927117
VL - 40
SP - 111
EP - 127
JO - Journal of Business & Economic Statistics
JF - Journal of Business & Economic Statistics
SN - 0735-0015
IS - 1
ER -