Opening the Blackbox: How Does Labor Market Policy Affect the Job Seekers' Behavior? A Field Experiment

Patrick Arni

No 9617, IZA Discussion Papers from IZA Network @ LISER

Abstract: Empirically, not much is known about the mechanisms how labor market programs like job search assistance and training operate to support finding a job. This paper provides novel evidence to open the "blackbox": it causally links the program interventions to the dynamics of search behavior, beliefs and non-cognitive skills. The study is based on a unique combination of a randomized field experiment with detailed register data and a panel of repeated surveys. The tested coaching program, focused on older job seekers, turns out to increase the job finding of participants by 9 percentage points (72% vs. 63% in the control group). The treatment effect is driven by a reduction of reservation wages and an increase in search efficiency. Moreover, I find short-run effects on motivation, self-confidence and beliefs. The job seekers overestimate their chances slightly less with respect to job interviews and salaries. Overall, the focus on realistic expectations and on search strategy appears to be important for program success. The experiment shows that evaluation designs which directly assess behavior can provide a fruitful base for targeted policy design.

Keywords: field experiment; labor market policy; older workers; reservation wages; job search behavior; non-cognitive skills; biased beliefs; dynamic treatment effects; unemployment insurance (search for similar items in EconPapers)
JEL-codes: J14 J64 J65 J68 (search for similar items in EconPapers)
Pages: 62 pages
Date: 2015-12
New Economics Papers: this item is included in nep-exp and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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