Counseling and monitoring of unemployed workers: theory and evidence from a controlled social experiment

Summary of Working paper 2001:12

We investigate the e ffect of counseling and monitoring on the individual transition rate to employment. We theoretically analyze these policies in a job search model with two search channels and endogenous search effort. In the empirical analysis we use unique administrative and survey data concerning a social experiment with full randomization and compliance. The results show that counseling and monitoring do not a ffect the exit rate to work. Monitoring causes a shift from informal to formal job search. We combine our empirical results to the results from our theoretical analysis and the existing empirical literature, to establish a comprehensive analysis of the e ffectiveness of these policies.

Keywords: unemployment duration, search e ffort, active labor market policy, treatment, search channels, multi-tasking, randomized social experiment.