What is the Value Added by Caseworkers?

55 Pages Posted: 8 May 2003

See all articles by Michael Lechner

Michael Lechner

University of St. Gallen - Swiss Institute for Empirical Economic Research

Jeffrey A. Smith

University of Wisconsin - Madison; National Bureau of Economic Research (NBER); Institute for the Study of Labor (IZA)

Multiple version iconThere are 2 versions of this paper

Date Written: March 2003


We investigate the allocation of unemployed individuals to different subprograms within Swiss active labour market policy by the caseworkers at local employment offices in Switzerland in 1998. We are particularly interested in whether the caseworkers allocate the unemployed to services in ways that will maximize the program-induced changes in their employment probabilities. Our econometric analysis uses unusually informative data originating from administrative unemployment and social security records. For the estimation we apply matching estimators adapted to the case of multiple programmes. The number of observations in this database is sufficiently high to allow for this nonparametric analysis to be conducted in narrowly defined subgroups. Our results indicate that Swiss caseworkers do not do a very good job of allocating their unemployed clients to the subprograms so as to maximize their subsequent employment prospects. Our findings suggest one of three possible conclusions. First, case-workers may be trying to solve the problem of allocating the unemployed to maximize their subsequent employment, but may lack the skills or knowledge to do this. Second, caseworkers may have a goal other than efficiency, such as allocating the most expensive services to the least well-off clients, that is not explicit in the law regulating active labour market policies. Third, the distortions of the local decision process could be due to federal authorities imposing strict minimum participation requirements for the various programs at the regional level.

Keywords: Targeting, statistical profiling, statistical treatment rule, active labour market policy, caseworkers

JEL Classification: H00, J68

Suggested Citation

Lechner, Michael and Smith, Jeffrey Andrew, What is the Value Added by Caseworkers? (March 2003). Available at SSRN: https://ssrn.com/abstract=405124

Michael Lechner

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Jeffrey Andrew Smith (Contact Author)

University of Wisconsin - Madison

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