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Public employment services under decentralization: Evidence from a natural experiment

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Abstract

We study whether decentralizing public employment services impacts job finding positively, as is suggested by the classic decentralization theorem, or negatively, as is suggested by political economy considerations. Our difference-in-difference estimates for a German reform in 2012 point to negative effects: Decentralization decreased job finding by 10% and increased the use of inefficient job creation programs that likely reduce local but increase federal public expenditures.

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  • Weber, Michael, 2017. "Public employment services under decentralization: Evidence from a natural experiment," VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168277, Verein für Socialpolitik / German Economic Association.
    • Handle: RePEc:zbw:vfsc17:168277
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    4. Blesse, Sebastian & Diegmann, André, 2022. "The place-based effects of police stations on crime: Evidence from station closures," Journal of Public Economics, Elsevier, vol. 207(C).
    5. Lukas Mergele & Michael Weber & Michael Weber, 2020. "Jobcenter: Optionskommunen vermitteln Arbeitslose seltener in Beschäftigung," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 73(02), pages 39-44, February.
    6. Mörk, Eva & Ottosson, Lillit & Vikman, Ulrika, 2021. "To work or not to work? Effects of temporary public employment on future employment and benefits," Working Paper Series 2021:12, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    7. 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.

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    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J48 - Labor and Demographic Economics - - Particular Labor Markets - - - Particular Labor Markets; Public Policy

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