The Employment and Displacement Effects of Job Counseling: Evidence from the U.S. Unemployment Insurance System

Marios Michaelides () and Peter Mueser
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Marios Michaelides: University of Cyprus

No 2208, Working Papers from Department of Economics, University of Missouri

Abstract: We present experimental evidence on the effects of a job counseling program targeting Unemployment Insurance (UI) recipients in Nevada both in the context of the Great Recession and a strong economy. The program reduced UI duration, yielded large UI savings, and improved participant employment and earnings in both periods. Effects are partly due to early participant exits to avoid program requirements (moral hazard effect) and partly due to participant exits after receiving counseling (services effect); however, it appears that moral hazard is more important during a tight market and services are more valuable during a recession. We find no evidence that the positive effects of job counseling for participants are accompanied by negative spillover effects for nonparticipants. Our findings support the view that, regardless of prevailing economic conditions, requiring UI recipients to receive job counseling at the start of their UI spells constitutes an effective reemployment policy.

Keywords: Great Recession; job counseling; reemployment assistance; active labor market policies; unemployment; Unemployment Insurance; program evaluation (search for similar items in EconPapers)
JEL-codes: H4 J6 (search for similar items in EconPapers)
Pages: 49 pgs.
Date: 2022-10
New Economics Papers: this item is included in nep-lab
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Persistent link: https://EconPapers.repec.org/RePEc:umc:wpaper:2208

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