Abstract

http://ssrn.com/abstract=1973910
 


 



Monitoring, Sanctions and Front-Loading of Job Search in a Non-Stationary Model


Bart Cockx


Ghent University - Sherppa - Faculty of Economics and Business Administration; IRES, Université Catholique de Louvain; Institute for the Study of Labor (IZA); CESifo (Center for Economic Studies and Ifo Institute)

Muriel Dejemeppe


Catholic University of Louvain - School of Economic and Social Research

Andrey Launov


University of Wuerzburg; Institute for the Study of Labor (IZA)

Bruno Van der Linden


Université Catholique de Louvain - Institut de Recherches Economiques et Sociales; Institute for the Study of Labor (IZA); Université Paris II - Panthéon-Assas - ERMES


IZA Discussion Paper No. 6181

Abstract:     
We develop and estimate a non-stationary job search model to evaluate a scheme that monitors job search effort and sanctions insured unemployed whose effort is deemed insufficient. The model reveals that such schemes provide incentives to the unemployed to front-load search effort prior to monitoring. This causes the job finding rate to increase above the post sanction level. After validating the model both internally and externally, we conclude that the scheme is effective in raising the job finding rate with minor wage losses. A basic cost-benefit analysis demonstrates that welfare losses for the unemployed are compensated by net efficiency gains for public authorities and society.

Number of Pages in PDF File: 44

Keywords: monitoring, sanctions, non-stationary job search, unemployment benefits, structural estimation

JEL Classification: J64, J68, C41

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Date posted: December 17, 2011  

Suggested Citation

Cockx, Bart and Dejemeppe, Muriel and Launov, Andrey and Van der Linden, Bruno, Monitoring, Sanctions and Front-Loading of Job Search in a Non-Stationary Model. IZA Discussion Paper No. 6181. Available at SSRN: http://ssrn.com/abstract=1973910

Contact Information

Bart L. W. Cockx (Contact Author)
Ghent University - Sherppa - Faculty of Economics and Business Administration ( email )
Ghent, B-9000
Belgium
IRES, Université Catholique de Louvain
Place Montesquieu, 3
Louvain-la-Neuve
Belgium
Institute for the Study of Labor (IZA)
P.O. Box 7240
Bonn, D-53072
Germany
CESifo (Center for Economic Studies and Ifo Institute)
Poschinger Str. 5
Munich, DE-81679
Germany
Muriel Dejemeppe
Catholic University of Louvain - School of Economic and Social Research ( email )
3, Place Montesquieu
1348 Louvain-la-Neuve
Belgium
+32 10 47 41 00 (Phone)
+32 10 47 39 45 (Fax)
Andrey Launov
University of Wuerzburg ( email )
Sanderring 2
Wuerzburg, D-97070
Germany
Institute for the Study of Labor (IZA)
P.O. Box 7240
Bonn, D-53072
Germany
Bruno Van der Linden
Université Catholique de Louvain - Institut de Recherches Economiques et Sociales ( email )
3, Place Montesquieu
Louvain-la-Neuve, 1348
Belgium
HOME PAGE: http://perso.uclouvain.be/bruno.vanderlinden/
Institute for the Study of Labor (IZA)
P.O. Box 7240
Bonn, D-53072
Germany
Université Paris II - Panthéon-Assas - ERMES
12 Place du Panthéon
Paris, Cedex 5, 75005
France
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