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Opening the Blackbox: How Does Labor Market Policy Affect the Job Seekers' Behavior? A Field Experiment

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  • Arni, Patrick

    (University of Bristol)

Abstract

Empirically, not much is known about the mechanisms how labor market programs like job search assistance and training operate to support finding a job. This paper provides novel evidence to open the "blackbox": it causally links the program interventions to the dynamics of search behavior, beliefs and non-cognitive skills. The study is based on a unique combination of a randomized field experiment with detailed register data and a panel of repeated surveys. The tested coaching program, focused on older job seekers, turns out to increase the job finding of participants by 9 percentage points (72% vs. 63% in the control group). The treatment effect is driven by a reduction of reservation wages and an increase in search efficiency. Moreover, I find short-run effects on motivation, self-confidence and beliefs. The job seekers overestimate their chances slightly less with respect to job interviews and salaries. Overall, the focus on realistic expectations and on search strategy appears to be important for program success. The experiment shows that evaluation designs which directly assess behavior can provide a fruitful base for targeted policy design.

Suggested Citation

  • Arni, Patrick, 2015. "Opening the Blackbox: How Does Labor Market Policy Affect the Job Seekers' Behavior? A Field Experiment," IZA Discussion Papers 9617, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp9617
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    Citations

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    Cited by:

    1. Yörük, Barış K., 2023. "Does public policy affect attitudes? Evidence from age-based health insurance coverage policies in the United States," Journal of Economic Behavior & Organization, Elsevier, vol. 205(C), pages 287-302.
    2. Adams-Prassl, Abi & Boneva, Teodora & Golin, Marta & Rauh, Christopher, 2023. "Perceived returns to job search," Labour Economics, Elsevier, vol. 80(C).
    3. Forslund, Anders, 2019. "Employment outcomes and policies in Sweden during recent decades," Working Paper Series 2019:15, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    4. Joost Bollens & Bart Cockx, 2017. "Effectiveness of a job vacancy referral scheme," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 6(1), pages 1-24, December.
    5. Cheung, Maria & Egebark, Johan & Forslund, Anders & Laun, Lisa & Rödin, Magnus & Vikström, Johan, 2019. "Does job search assistance reduce unemployment? Experimental evidence on displacement effects and mechanisms," Working Paper Series 2019:25, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    6. Arni, Patrick, 2017. "What Drives Wage Effects of Unemployment Benefits? Evidence from Natural Experiments and Reservation Wage Data," VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168154, Verein für Socialpolitik / German Economic Association.
    7. Forslund, Anders & Laun, Lisa & Vikström, Johan & Egebark, Johan & Rödin, Magnus & Cheung, Maria, 2020. "Implementation of a labor market program with more frequent meetings in Sweden," Working Paper Series 2020:22, IFAU - Institute for Evaluation of Labour Market and Education Policy.

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    More about this item

    Keywords

    field experiment; labor market policy; older workers; reservation wages; job search behavior; non-cognitive skills; biased beliefs; dynamic treatment effects; unemployment insurance;
    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
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination

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