Public employment agencies and unemployment spells: reconciling the experimental and non-experimental evidence

Jonathan M. Thomas
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Jonathan M. Thomas: Institute for Fiscal Studies

No W96/12, IFS Working Papers from Institute for Fiscal Studies

Abstract: According to the econometric literature, unemployed jobseekers who use a Public Employment Agency (PEA) have longer unemployment spells than those choosing alternative search methods. This contrasts sharply with the findings from well-designed US experiments where treatments subject to increased PEA services have shorter spells. We argue that the non-experimental studies are biased towards finding a positive relation as they ignore the possibility that PEA's are chosen after some unemployment has been accumulated. Exploiting UK microdata with information on the timing of PEA usage we present new econometric evidence in line with the experiments. Delays in PEA use can also explain previous econometric findings.

Date: 1996-09-06
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