Working Paper Series, Uppsala Center for Labor Studies, Department of Economics, Uppsala University
Effects of contracting out employment services: Evidence from a randomized experiment
(), Erik Grönqvist
() and Björn Öckert
Abstract: In many countries welfare services that traditionally have
been provided by the public sector are being contracted out to private
providers. But are private contractors better at providing these services?
We use a randomized experiment to empirically assess the effectiveness of
contracting out employment services to private placement agencies. Our
results show that unemployed at private placement agencies have a closer
interaction with their case worker than unemployed at the Public Employment
Service (PES); e.g., they receive more assistance in improving their job
search technology. We do not find any overall difference in the chances of
finding employment between private placement agencies and the PES, but this
hides important heterogeneities across different types of unemployed. In
particular, private providers are better at providing employment services
to immigrants, whereas they may be worse for adolescents. Any effects tend
to fade away over time.
Keywords: Job placement; Contracting out; Randomized experiment; (follow links to similar papers)
JEL-Codes: H44; J68; L33; (follow links to similar papers)
55 pages, December 4, 2012
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