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Monitoring, Sanctions and Front-Loading of Job Search in a Non-Stationary Model

Author

Listed:
  • Bart Cockx

    (Sherppa, Ghent U., IZA and CESIfo)

  • Muriel Dejemeppe

    (IRES, Universit´e catholique de Louvain)

  • Andrey Launov

    (Department of Economics, Johannes Gutenberg-Universitaet Mainz, Germany)

  • Bruno Van der Linden

    (IRES, Universit´e catholique de Louvain, FNRS and IZA)

Abstract
We develop and estimate a non-stationary job search model to evaluate a scheme that monitors job search effort and sanctions insured unemployed whose effort is deemed insufficient. The model reveals that such schemes provide incentives to the unemployed to front-load search effort prior to monitoring. This causes the job finding rate to increase above the post sanction level. After validating the model both internally and externally, we conclude that the scheme is effective in raising the job finding rate with minor wage losses. A basic cost-benefit analysis demonstrates that welfare losses for the unemployed are compensated by net efficiency gains for public authorities and society.

Suggested Citation

  • Bart Cockx & Muriel Dejemeppe & Andrey Launov & Bruno Van der Linden, 2011. "Monitoring, Sanctions and Front-Loading of Job Search in a Non-Stationary Model," Working Papers 1114, Gutenberg School of Management and Economics, Johannes Gutenberg-Universität Mainz, revised 21 Nov 2011.
    • Handle: RePEc:jgu:wpaper:1114
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    References listed on IDEAS

    as
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    Citations

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    Cited by:

    1. Bart Cockx & Stijn Baert, 2015. "Contracting Out Mandatory Counselling and Training for Long-Term Unemployed. Private For-Profit or Non-Profit, or Keep it Public?," CESifo Working Paper Series 5587, CESifo.
    2. Bart Cockx & Muriel Dejemeppe & Andrey Launov & Bruno Van der Linden, 2018. "Imperfect Monitoring of Job Search: Structural Estimation and Policy Design," Journal of Labor Economics, University of Chicago Press, vol. 36(1), pages 75-120.
    3. Bart Cockx & Corinna Ghirelli & Bruno Van der Linden, 2013. "Monitoring Job Search Effort with Hyperbolic Time Preferences and Non-Compliance: A Welfare Analysis," CESifo Working Paper Series 4187, CESifo.
    4. Gerard J. van den Berg & Bas van der Klaauw, 2019. "Structural Empirical Evaluation Of Job Search Monitoring," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 60(2), pages 879-903, May.
    5. Cockx, Bart & Ghirelli, Corinna & Van der Linden, Bruno, 2014. "Is it socially efficient to impose job search requirements on unemployed benefit claimants with hyperbolic preferences?," Journal of Public Economics, Elsevier, vol. 113(C), pages 80-95.
    6. Hillmann, Katja & Hohenleitner, Ingrid, 2015. "Impact of welfare sanctions on employment entry and exit from labor force: Evidence from German survey data," HWWI Research Papers 168, Hamburg Institute of International Economics (HWWI).
    7. Cockx, Bart & Dejemeppe, Muriel, 2012. "Monitoring job search effort: An evaluation based on a regression discontinuity design," Labour Economics, Elsevier, vol. 19(5), pages 729-737.

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    More about this item

    Keywords

    Monitoring; sanctions; non-stationary job search; unemployment benefits; structural estimation;
    All these keywords.

    JEL classification:

    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy
    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies

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