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Structural Empirical Analysis of Vacancy Referrals with Imperfect Monitoring and the Strategic Use of Sickness Absence

Author

Listed:
  • Gerard J. van den Berg

    (University of Groningen, University Medical Center Groningen, IFAU Uppsala, ZEW, IZA, CEPR)

  • Hanno Foerster

    (Boston College, IZA)

  • Arne Uhlendorf

    (CNRS and CREST, IAB Nuremberg, DIW, IZA)

Abstract

This paper provides a structural analysis of the role of job vacancy referrals (VRs) by public employment agencies in the job search behavior of unemployed individuals, incorporating institutional features of the monitoring of search behavior by the agencies. Notably, rejections of VRs may lead to sanctions (temporary benefits reductions) while workers may report sick to avoid those. We estimate models using German administrative data from social security records linked with caseworker recorded data on VRs, sick reporting and sanctions. The analysis highlights the influence of aspects of the health care system on unemployment durations. We estimate that for around 25% of unemployed workers, removing the channel that enables strategic sick reporting reduces the mean unemployment duration by 4 days.

Suggested Citation

  • Gerard J. van den Berg & Hanno Foerster & Arne Uhlendorf, 2023. "Structural Empirical Analysis of Vacancy Referrals with Imperfect Monitoring and the Strategic Use of Sickness Absence," Working Papers 2023-10, Center for Research in Economics and Statistics.
    • Handle: RePEc:crs:wpaper:2023-10
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    References listed on IDEAS

    as
    1. Gerard J. van den Berg & Bas van der Klaauw, 2006. "Counseling And Monitoring Of Unemployed Workers: Theory And Evidence From A Controlled Social Experiment," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 47(3), pages 895-936, August.
    2. Heckman, James & Singer, Burton, 1984. "A Method for Minimizing the Impact of Distributional Assumptions in Econometric Models for Duration Data," Econometrica, Econometric Society, vol. 52(2), pages 271-320, March.
    3. 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.
    4. Gerard J. Berg & Johan Vikström, 2014. "Monitoring Job Offer Decisions, Punishments, Exit to Work, and Job Quality," Scandinavian Journal of Economics, Wiley Blackwell, vol. 116(2), pages 284-334, April.
    5. Launov, Andrey & Wälde, Klaus, 2016. "The employment effect of reforming a public employment agency," European Economic Review, Elsevier, vol. 84(C), pages 140-164.
    6. Gerard J van den Berg & Barbara Hofmann & Arne Uhlendorff, 2019. "Evaluating Vacancy Referrals and the Roles of Sanctions and Sickness Absence," The Economic Journal, Royal Economic Society, vol. 129(624), pages 3292-3322.
    7. Jeremy Lise & Shannon Seitz & Jeffrey Smith, 2015. "Evaluating search and matching models using experimental data," IZA Journal of Labor Economics, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-35, December.
    8. Benedicte Carlsen & Jo Thori Lind & Karine Nyborg, 2020. "Why physicians are lousy gatekeepers: Sicklisting decisions when patients have private information on symptoms," Health Economics, John Wiley & Sons, Ltd., vol. 29(7), pages 778-789, July.
    9. Flinn, C. & Heckman, J., 1982. "New methods for analyzing structural models of labor force dynamics," Journal of Econometrics, Elsevier, vol. 18(1), pages 115-168, January.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    unemployment; wage; sanctions; moral hazard; sickness absence; physician; structural estimation; counterfactual policy evaluation; unemployment duration;
    All these keywords.

    JEL classification:

    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • C54 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Quantitative Policy Modeling

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