Monitoring Job Offer Decisions, Punishments, Exit to Work, and Job Quality

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.econstor.eu The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit organization supported by Deutsche Post Foundation. The center is associated with the University of Bonn and offers a stimulating research environment through its international network, workshops and conferences, data service, project support, research visits and doctoral program. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E SIZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author. We analyze the effect of sanctions on the ensuing job quality, notably on wage rates and hours worked, and we examine how often a sanction leads to a lower occupational level. The data cover the Swedish population over 1999-2004. We estimate duration models dealing with selection on unobservables. We use weighted exogenous sampling maximum likelihood to deal with the fact the data register is large whereas observed punishments are rare. We also develop a theoretical job search model with monitoring of job offer rejection vis-a-vis monitoring of job search effort. The observation window includes a policy change in which the punishment severity was reduced. We find that the hourly wage and the number of hours are on average lower after a sanction, and that individuals move more often to a lower occupational level, incurring human capital losses. Monitoring offer rejections is less effective than monitoring search effort.JEL Classification: J64, C41, C21, J31, J44, J65, J62

The impact of monitoring and sanctioning on unemployment exit and job-finding rates

“…Some find significant positive effects of sanctions on the probability of leaving the labor market [2]. A study on Sweden finds negative effects of sanctions on post-unemployment wages-consistent with a reduction in the quality of job matches-and on hours worked [13]. It also finds that these negative effects persist, and that they may increase in magnitude for up to four years after the return to work.…”

“…One of them also finds differences in sanction effects across different (sectoral) unemployment insurance agencies [1]. A study on Sweden also finds a positive effect of receiving a sanction on job entry that is larger for women than for men, as well as differences in effect by age, but no difference by education level or local unemployment rate [13]. A study for Germany finds differences in sanction effects by age, with increases in regular employment driven primarily by younger unemployed workers receiving sanctions.…”

“…Two studies find that the effect of receiving a sanction diminishes over the time that has elapsed since the sanction was imposed. Another study finds no effect of elapsed time [13].…”

Maximum likelihood and economic modeling

“…This approach is useful for broader prospective policy analysis. Recent contributions to the literature provide more examples and discussions of the possibilities and difficulties [8], [9], [10], [11], [12]. Finally, the model and the estimates are useful for modeling and understanding the distributional effects of policy in different environments or under distinct scenarios.…”

Job Creation Schemes in Turbulent Times

“…Abbring and van den Berg (2003) provide a proof for continuous time models (for identification in dynamic discrete models see Heckman and Navarro (2007)). In a second step we investigate the subsequent employment stability of program participants and nonparticipants by introducing a third transition process similar to van den Berg and Vikström (2014). In addition, we estimate models allowing for a random treatment effect following Richardson and van den Berg (2013) and models with two treatments (JCSs and training), whereby we allow the probability of entering one treatment to depend on the participation in another treatment.…”