Abstract
Job vacancy referrals are a common active labor market policy measure to help unemployed workers to find a job. Unemployment insurance agencies may combat moral hazard by punishing refusals to apply to assigned vacancies. However, the possibility to report sick creates an additional moral hazard, since during sickness spells, minimum requirements on search behavior do not apply. This reduces the ex ante threat of sanctions. We analyze the effects of vacancy referrals and sanctions on the unemployment duration and the quality of job matches, in conjunction with the possibility to report sick. We estimate multi-spell duration models with selection on unobserved characteristics. We find that a vacancy referral increases the transition rate into work and that such accepted jobs go along with lower wages. We also find a positive effect of a vacancy referral on the probability of reporting sick.
Original language | English |
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Article number | uez032 |
Pages (from-to) | 3292-3322 |
Number of pages | 31 |
Journal | Economic Journal |
Volume | 129 |
Issue number | 624 |
Early online date | 18 Jul 2019 |
DOIs | |
Publication status | Published - 1 Nov 2019 |
Structured keywords
- ECON Applied Economics
- ECON CEPS Welfare
Keywords
- unemployment insurance
- unemployment
- physician
- job vacancy
- moral hazard
- job search assistance
- monitoring