Structural Empirical Evaluation of Job Search Monitoring

41 Pages Posted: 4 Dec 2013

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

Bas van der Klaauw

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

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Abstract

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

Suggested Citation

van den Berg, Gerard J. and van der Klaauw, Bas, Structural Empirical Evaluation of Job Search Monitoring. IZA Discussion Paper No. 7740. Available at SSRN: https://ssrn.com/abstract=2363227

Gerard J. Van den Berg (Contact Author)

VU University Amsterdam - Department of Economics ( email )

De Boelelaan 1105
1081 HV Amsterdam
Netherlands
+31 20 444 6132 (Phone)
+32 20 444 6020 (Fax)

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

Bas Van der Klaauw

VU University Amsterdam - Department of Economics ( email )

De Boelelaan 1105
1081 HV Amsterdam
Netherlands
+31 20 444 6120 (Phone)
+31 20 444 6005 (Fax)

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

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