A Structural Analysis of Vacancy Referrals with Imperfect Monitoring and the Strategic Use of Sickness Absence

Gerard van den Berg, Hanno Foerster and Arne Uhlendorff

No 1042, Boston College Working Papers in Economics from Boston College Department of Economics

Abstract: This paper provides a structural analysis of the role of job vacancy referrals (VRs) by Employment Agencies in the job search behavior of unemployed individuals, incorporating in- stitutional features of the monitoring of search behavior by the agencies. Notably, rejections of VRs may lead to sanctions (temporary benefits reductions) while workers may report sick to avoid those. We estimate models using German administrative data from social security records linked with caseworker recorded data on VRs, sick reporting and sanctions. The anal- ysis highlights the influence of aspects of the health care system on unemployment durations. We estimate that for around 25% of unemployed workers, removing the channel that enables strategic sick reporting reduces the mean unemployment duration by 8 days.

Keywords: unemployment; wage; unemployment insurance; monitoring; moral hazard; struc- tural estimation; counterfactual policy evaluation; unemployment duration (search for similar items in EconPapers)
JEL-codes: C51 C54 J64 J65 (search for similar items in EconPapers)
Date: 2021-08-17, Revised 2023-09-17
New Economics Papers: this item is included in nep-eur, nep-hea and nep-ias
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