Public employment services under decentralization: evidence from a natural experiment
Lukas Mergele and
Michael Weber ()
No 2017002, Working Papers from Berlin Doctoral Program in Economics and Management Science (BDPEMS)
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 active labor market programs and monitoring strategies which diminish job seekersâ€™ 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 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eur and nep-lma
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Working Paper: Public employment services under decentralization: Evidence from a natural experiment (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:bdp:wpaper:2017002
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