Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/53129
Authors: 
Cockx, Bart
Dejemeppe, Muriel
Launov, Andrey
van der Linden, Bruno
Year of Publication: 
2011
Series/Report no.: 
CESifo working paper: Labour Markets 3660
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 insufficient. 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.
Subjects: 
monitoring
sanctions
non-stationary job search
unemployment benefits
structural estimation
JEL: 
J64
J68
C41
Document Type: 
Working Paper

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