Monitoring Job Offer Decisions, Punishments, Exit to Work, and Job Quality

53 Pages Posted: 4 Aug 2009

See all articles by Gerard J. van den Berg

Gerard J. van den Berg

VU University Amsterdam - Department of Economics; Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics; Tinbergen Institute

Johan Vikström

Uppsala University; IFAU - Institute for Labour Market Policy Evaluation

Multiple version iconThere are 3 versions of this paper

Abstract

Unemployment insurance systems include monitoring of unemployed workers and punitive sanctions if job search requirements are violated. We analyze the effect of sanctions on the ensuing job quality, notably on wage rates and hours worked, and we examine how often a sanction leads to a lower occupational level. The data cover the Swedish population over 1999-2004. We estimate duration models dealing with selection on unobservables. We use weighted exogenous sampling maximum likelihood to deal with the fact the data register is large whereas observed punishments are rare. We also develop a theoretical job search model with monitoring of job offer rejection versus monitoring of job search effort. The observation window includes a discontinuous policy change in which the punishment severity was reduced. We find that the hourly wage and the number of hours are lower after a sanction, and that individuals move more often to a lower occupational level, incurring human capital losses. Monitoring offer rejections is less effective than monitoring search effort.

Keywords: case worker, weighted exogenous sampling maximum likelihood, hours worked, wage, sanction, duration, unemployment, job offer, offer rejection, search effort

JEL Classification: J64, C41, C21, J31, J44, J65, J62

Suggested Citation

van den Berg, Gerard J. and Vikström, Johan, Monitoring Job Offer Decisions, Punishments, Exit to Work, and Job Quality. IZA Discussion Paper No. 4325. Available at SSRN: https://ssrn.com/abstract=1442620

Gerard J. Van den Berg (Contact Author)

VU University Amsterdam - Department of Economics ( email )

De Boelelaan 1105
1081 HV Amsterdam
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+31 20 444 6132 (Phone)
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Centre for Economic Policy Research (CEPR)

London
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Tinbergen Institute

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

Johan Vikström

Uppsala University ( email )

Box 513
Uppsala, 751 20
Sweden

IFAU - Institute for Labour Market Policy Evaluation

Box 513
751 20 Uppsala
Sweden

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