Public employment services under decentralization: Evidence from a natural experiment

Lukas Mergele and Michael Weber

Journal of Public Economics, 2020, vol. 182, issue C

Abstract: This paper studies whether the decentralization of public employment services (PES) increases job placements among the unemployed. Decentralizing PES has been a widely applied reform used by governments aiming to enhance their efficacy. However, economic theory is ambiguous about its effects, and empirical evidence has been scarce. Using a difference-in-differences design, we exploit unique within-country variation in decentralization provided by the partial devolution of German job centers in 2012. We find that decentralization reduces job placements by approximately 10%. Decentralized providers expand the use of public job creation schemes which diminish job seekers' reemployment prospects but shift costs to higher levels of government.

Keywords: Decentralization; Public employment services; Job placements (search for similar items in EconPapers)
JEL-codes: H11 H75 I38 J48 J64 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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Related works:
Working Paper: Public Employment Services under Decentralization: Evidence from a Natural Experiment (2019)
Working Paper: Public employment services under decentralization: Evidence from a natural experiment (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:pubeco:v:182:y:2020:i:c:s0047272719301756

DOI: 10.1016/j.jpubeco.2019.104113

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