Private and Public Placement Services for Hard-to-Place Unemployed

Abstract

The authors analyze a randomized field experiment in two German labor market agencies that provide public and private provision of intensive job placement services. The findings, based on analysis of administrative agency data over 18 months in 2009–2010, show that assignment to public employment services reduced accumulated days in unemployment by one to two months, compared to an assignment to a private provider. The effects, however, were short-lived. Moreover, two-thirds of the effect is attributable to labor force withdrawals. Finally, several important differences in the modes of service provision are only partially attributable to inherent aspects of in-house production and contracting out.