Does Job-Search Assistance Affect Search Effort and Outcomes? A Microeconometric Analysis of Public Versus Private Search Methods

54 Pages Posted: 18 Nov 2005  

Denis Fougère

National Institute of Statistics and Economic Studies (INSEE) - National School for Statistical and Economic Administration (ENSAE); National Center for Scientific Research (CNRS); IZA Institute of Labor Economics

Jacqueline Pradel

Université Paris I Panthéon-Sorbonne

Muriel Roger

Banque de France

Date Written: October 2005

Abstract

In this paper, we examine the disincentive effects of the public employment service on the search effort of unemployed workers and on their exit rate from unemployment. For that purpose, we specify a structural search model with fixed and variable costs of search in which unemployed workers select their optimal search intensity given the exogenous arrival rate of job offers coming from the public employment agency. Because the theoretical effect of an increase in this exogenous job offer arrival rate on the structural exit rate from unemployment is ambiguous, we estimate this model using individual unemployment duration data. Our results show that the exit rate from unemployment increases with the arrival rate of job contacts obtained by the public employment service, especially for low-educated and low-skilled workers. They also show that the search effort is more costly for low-educated women and low-skilled adult unemployed workers. This last result suggests that a public employment agency that matches searchers and employers is beneficial, in the sense that it saves searchers in terms of search costs they would otherwise bear.

Keywords: job search, search intensity, public employment agency, simulated maximum likelihood

JEL Classification: C41, J64

Suggested Citation

Fougère, Denis and Pradel, Jacqueline and Roger, Muriel, Does Job-Search Assistance Affect Search Effort and Outcomes? A Microeconometric Analysis of Public Versus Private Search Methods (October 2005). IZA Discussion Paper No. 1825. Available at SSRN: https://ssrn.com/abstract=851184

Denis Fougere (Contact Author)

National Institute of Statistics and Economic Studies (INSEE) - National School for Statistical and Economic Administration (ENSAE) ( email )

15, Boulevard Adolphie PINARD
92245 Malakoff Cedex
France
+33 1 4117 7713 (Phone)
+33 1 4117 7634 (Fax)

National Center for Scientific Research (CNRS)

3, rue Michel-Ange
Paris cedex 16, 75794
France

IZA Institute of Labor Economics

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

Jacqueline Pradel

Université Paris I Panthéon-Sorbonne ( email )

12, place du Panthéon
Paris, IL
France

Muriel Roger

Banque de France ( email )

France

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