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Monitoring, Sanctions and Front-Loading of Job Search in a Non-Stationary Model

Bart Cockx (), Muriel Dejemeppe (), Andrey Launov () and Bruno Van der Linden ()

Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium from Ghent University, Faculty of Economics and Business Administration

Abstract: We develop and estimate a non-stationary job search model to evaluate a scheme that monitors job search effort and sanctions insured unemployed whose effort is deemed insuffcient. The model reveals that such schemes provide incentives to the unemployed to front-load search effort prior to monitoring. This causes the job finding rate to increase above the post sanction level. After validating the model both internally and externally, we conclude that the scheme is effective in raising the job finding rate with minor wage losses. A basic cost-benefit analysis demonstrates that welfare losses for the unemployed are compensated by net efficiency gains for public authorities and society.

Keywords: Monitoring; sanctions; non-stationary job search; unemployment benefits; structural estimation. (search for similar items in EconPapers)
JEL-codes: J64 J68 C41 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2011-11
New Economics Papers: this item is included in nep-lab
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Related works:
Working Paper: Monitoring, Sanctions and Front-Loading of Job Search in a Non-Stationary Model (2011) Downloads
Working Paper: Monitoring, Sanctions and Front-Loading of Job Search in a Non-Stationary Model (2011) Downloads
Working Paper: Monitoring, Sanctions and Front-Loading of Job Search in a Non-Stationary Model (2011) Downloads
Working Paper: Monitoring, Sanctions and Front-Loading of Job Search in a Non-Stationary Model (2011) Downloads
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