Scandinavian Working Papers in Economics

Working Paper Series,
IFAU - Institute for Evaluation of Labour Market and Education Policy

No 2001:12: Counseling and monitoring of unemployed workers: theory and evidence from a controlled social experiment

Gerhard van den Bergh and Bas van deer Klaauw
Additional contact information
Gerhard van den Bergh: Free University Amsterdam, Tinbergen Institute, Postal: Labour Market Policy Evaluation, P O Box 513, SE-751 20 Uppsala, Sweden
Bas van deer Klaauw: Free University Amsterdam and Scholar, Postal: Free University Amsterdam, Department of Economics , De Boelelaan 1105 , NL-1081 HV Amsterdam , The Netherlands

Abstract: We investigate the effect of conseling and monitoring on the individual transition rate to employment. We theoretically analyze these policies in a job search model with two search channels and endogenous search effort. In the empirical analysis we use unique administrative and survey data concerning a social experiment with full randomization and compliance. The results show that counseling and monitoring do not affect the exit rate to work. Monitoring causes a shift from informal to formal job search. We combine our empirical results to the results from our theoretical analysis and the existing empirical literature, to establish a comprehensive analysis of the effectiveness of these policies.

Keywords: unemployment duration; search effort; active labor market policy; treatment; search channels; multi-tasking; randomized social experiment

JEL-codes: J64

50 pages, August 24, 2001

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