Contracting Out Mandatory Counselling and Training for Long-Term Unemployed. Private For-Profit or Non-Profit, or Keep it Public?

52 Pages Posted: 3 Dec 2015  

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)

Stijn Baert

Ghent University; University of Antwerp; Catholic University of Louvain (UCL); Institute for the Study of Labor (IZA)

Multiple version iconThere are 2 versions of this paper

Date Written: November 2, 2015

Abstract

This study evaluates the effectiveness of contracting out mandatory publicly provided counselling and training for long-term unemployed in Flanders (Belgium) to private for-profit and non-profit organisations (FPOs and NPOs). A multivariate transition model exploits timing-of-events and novel exclusion restrictions to account for selection on unobservables. Overall, the intervention was highly effective in reducing unemployment duration, but also spurred employment instability and withdrawals from the labour force. FPOs slightly, but significantly enhanced exits to employment without reinforcing recidivism relative to the public provider but not significantly relative to NPOs. FPOs also charged lower prices and hence were the best performing providers.

Keywords: contracting out of employment services, non-profit versis profit, private provision of public services, timing-of-events, long-term unemployment

JEL Classification: C210, C410, C530, H440, J640, J650, J680

Suggested Citation

Cockx, Bart L. W. and Baert, Stijn, Contracting Out Mandatory Counselling and Training for Long-Term Unemployed. Private For-Profit or Non-Profit, or Keep it Public? (November 2, 2015). CESifo Working Paper Series No. 5587. Available at SSRN: https://ssrn.com/abstract=2698581

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

Stijn Baert

Ghent University ( email )

University of Antwerp ( email )

Prinsstraat 13
Antwerp, Antwerp 2000
Belgium

HOME PAGE: http://https://www.uantwerpen.be/nl/personeel/stijn-baert/

Catholic University of Louvain (UCL) ( email )

Place Montesquieu, 3
Louvain-la-Neuve, 1348
Belgium

HOME PAGE: http://https://www.uclouvain.be/en-309318.html

Institute for the Study of Labor (IZA) ( email )

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

HOME PAGE: http://www.iza.org/en/webcontent/personnel/photos/index_html?key=6832

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