Working Paper: CEPR ID: DP9751
Authors: Gerard J. van den Berg; Bas van der Klaauw
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 over-all benefits reduction in a way that is neutral to the worker results in slightly smaller effects with lower administrative costs.
Keywords: Active Labor Market Policy; Job Duration; Job Mobility; Multitasking; Randomized Social Experiment; Search Channels; Search Effort; Treatment; Unemployment Duration; Wage
JEL Codes: C31; C32; D82; D83; J62; J64; J65; J68
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Monitoring vs. Re-Employment Bonuses (J33) | Job Search Behavior (J29) |
| On-the-Job Search (J68) | Mitigation of Adverse Effects of Monitoring on Wages (J38) |
| Job Search Monitoring (J68) | Quality of Post-Unemployment Jobs (J68) |
| Job Search Monitoring (J68) | Post-Unemployment Wages (J39) |
| Job Search Monitoring (J68) | Job Search Effort (J68) |