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Behavior and Effectiveness of Decentralized Employment Offices

Author

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  • Ohto Kanninen
  • Hannu Karhunen
  • Jeremias Nieminen

Abstract

We study how decentralization of public employment services affects the labor market outcomes of job seekers and the behavior of employment offices. We utilize a Finnish temporary reform during which employment services were decentralized for specific target groups of job seekers in 23 treated municipalities and remained centralized for others. We estimate causal effects of the temporary reform using individual level difference-in-differences in a matched sample. We find no evidence of better labor market outcomes and find that municipalities are able to shift 14-17 % of their unemployment benefit costs to the central government.

Suggested Citation

  • Ohto Kanninen & Hannu Karhunen & Jeremias Nieminen, 2021. "Behavior and Effectiveness of Decentralized Employment Offices," Working Papers 332, Työn ja talouden tutkimus LABORE, The Labour Institute for Economic Research LABORE.
    • Handle: RePEc:pst:wpaper:332
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    References listed on IDEAS

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    More about this item

    Keywords

    public employment services; fiscal federalism; decentralization;
    All these keywords.

    JEL classification:

    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • J48 - Labor and Demographic Economics - - Particular Labor Markets - - - Particular Labor Markets; Public Policy

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