Structural Empirical Evaluation of Job Search Monitoring
41 Pages Posted: 4 Dec 2013
We structurally estimate a novel job search model with endogenous job search effort, job quality dispersion, and effort monitoring, taking into account that monitoring effects may be mitigated by on-the-job search and search channel substitution. The data are from a randomized experiment conducted in the Netherlands. They include registers of post-unemployment outcomes like wages and job mobility, and survey data on measures of search behavior. As such we are the first to study monitoring effects on post-unemployment outcomes.We find that the option to climb the job ladder reduces substitution between search channels during unemployment and compensates for adverse long-run effects of monitoring on wages. We use the structural estimates to compare monitoring to counterfactual policies against moral hazard, like re-employment bonuses and changes in the unemployment benefits path. Replacing monitoring by an overall benefits reduction in a way that is neutral to the worker results in slightly smaller effects with lower administrative costs.
Keywords: unemployment duration, search effort, active labor market policy, wage, job duration, job mobility, treatment, search channels, multi-tasking, randomized social experiment
JEL Classification: J64, J65, J68, J62, D83, D82, C31, C32
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