STRUCTURAL EMPIRICAL EVALUATION OF JOB SEARCH MONITORING

Abstract

AbstractTo evaluate search effort monitoring of unemployed workers, it is important to take account of post‐unemployment wages and job‐to‐job mobility. We structurally estimate a model with search channels, using a controlled trial in which monitoring is randomized. The data include registers and survey data on search behavior. We find that the opportunity to move to better‐paid jobs in employment reduces the extent to which monitoring induces substitution toward formal search channels in unemployment. Job mobility compensates for adverse long‐run effects of monitoring on wages. We examine counterfactual policies against moral hazard, like reemployment bonuses and changes of the benefits path.