Private Provisioning of Employment Services : Experimental Evidence from Bosnia and Herzegovina

This paper examines the effect of compensating a private sector provider of employment services for successful placement of jobseekers with employers. Within this program, active job matching, relative to only job counseling, contributes to a significantly higher rate of employment, and these effects are more pronounced for subgroups that are less likely to find employment without assistance, including youth and low-skilled workers. Among the jobseekers randomly allocated to matching, those who were judged by counselors to be “employable” were far more likely to be matched to employers. To understand the decisions made to rate jobseekers as employable, the paper makes use of both information directly observable to job counselors and characteristics and personality traits from a separate survey of the jobseekers. Evidence suggests that under incentivized matching, counselor assessments of employability and designation for more intensive effort are consistent with cream-skimming.