The Role of Sickness in the Evaluation of Job Search Assistance and Sanctions

Gerard van den Berg, Barbara Hofmann () and Arne Uhlendorff
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Barbara Hofmann: University of Mannheim, IAB Nuremberg

No 2016-17, Working Papers from Center for Research in Economics and Statistics

Abstract: Unemployment insurance agencies may combat moral hazard by punishing refusals to apply to assigned vacancies. However, the possibility to report sick creates an additional moral hazard, since during sickness spells, minimum requirements on search behavior do not apply. This reduces the ex ante threat of sanctions. We analyze the e?ects of vacancy referrals and sanctions on the unemployment duration and the quality of job matches, in conjunction with the possibility to report sick. We estimate multi-spell duration models with selection on unobserved characteristics. We ?nd that a vacancy referral increases the transition rate into work and that such accepted jobs go along with lower wages. We also ?nd a positive e?ect of a vacancy referral on the probability of reporting sick. This e?ect is smaller at high durations, which suggests that the relative attractiveness of vacancy referrals increases over the time spent in unemployment. Overall, around 9% of sickness absence during unemployment is induced by vacancy referrals.

Keywords: unemployment; vacancy referrals; physician; wage; unemployment insurance; monitoring; moral hazard. (search for similar items in EconPapers)
JEL-codes: C21 C41 J64 J65 (search for similar items in EconPapers)
Pages: 54
Date: 2016-04
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Citations: View citations in EconPapers (9)

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Related works:
Working Paper: The role of sickness in the evaluation of job search assistance and sanctions (2017)
Working Paper: The Role of Sickness in the Evaluation of Job Search Assistance and Sanctions (2016)
Working Paper: The Role of Sickness in the Evaluation of Job Search Assistance and Sanctions (2016)
Working Paper: The role of sickness in the evaluation of job search assistance and sanctions (2016)
Working Paper: The Role of Sickness in the Evaluation of Job Search Assistance and Sanctions (2016)
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