Amelie Schiprowski, University of Bonn

"Reducing Mandatory Job Search in Unemployment Insurance"

Abstract

This paper studies the effects of a market-level reduction in job search provided by unemployment benefit recipients. We exploit a large-scale policy experiment in Switzerland, where a subset of Public Employment Services drastically reduced the number of required applications and vacancy referrals. Using detailed administrative data and difference-in-differences designs, we find that the policy change increased the average duration of unemployment spells by about 6%, implying an elasticity of job finding to search of about 0.25. We find suggestive evidence of limited market externalities from job search due to highly elastic vacancy posting. Finally, the policy change increased reemployment earnings by about 2% on average, suggesting that job seekers were able to direct their search toward higher paying jobs.

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Contact person: Robert Mahlstedt