How do Extended Benefits Affect Unemployment Duration? A Regression Discontinuity Approach

This paper studies a program that extends the maximum duration of unemployment benefits from 30 weeks to 209 weeks. Interestingly, this program is targeted to individuals aged 50 years or older, living in certain eligible regions in Austria. In the evaluation, I use sharp discontinuities in treatment assignment at age 50 and at the border between eligible regions and control regions to identify the effect of extended benefits on unemployment duration. Results indicate that the duration of job search is prolonged by at least .09 weeks per additional week of benefits among men, whereas unemployment duration increases by at least .32 weeks per additional week of benefits among women. The salient differences between men and women are consistent with the lower minimum age for early retirement applying to women.benefit duration, unemployment duration, early retirement, regression discontinuity

Auctions vs negotiations in public procurement: which works better?

Public agencies rely on two key modes to procure goods and services: auctions and direct negotiations. The relative advantages of these two modes are still imperfectly understood. This paper therefore studies public procurement of regional passenger railway services in Germany, where regional agencies can use auctions and negotiations to procure regional passenger rail services. This offers the unique opportunity to assess the two procurement modes within the same institutional and legal framework. We first characterize the decisions of the agency in a simple reduced form framework of negotiations and auctions. This analysis suggests accounting for the endogeneity of the choice of procurement mode by estimating the mode of procurement, quantity and price simultaneously. We then test this framework using information on lines that were auctioned and lines that were directly negotiated with the former monopolist. Results indicate (i) endogeneity of procurement choice can be fully characterized by observed line characteristics; (ii) frequency of service is 16 percent higher on lines that were auctioned compared to lines that were negotiated, and (iii) the procurement price is 25 percent lower on auctioned lines than on those with direct negotiations. Taken together, these results indicate a significant efficiency enhancing effect of auctions.Auctions, negotiations, liberalization, passenger railways, public procurement

Entry in liberalized railway markets: The German experience

In Germany, competitive franchising is increasingly being used to procure passenger railway services that were previously provided by a state monopolist. This paper analyzes the 77 tenders that have taken place since the railway reform in 1994. The tenders differ with respect to the size of the franchise network, the required frequency of service, the duration of the contract and the proximity to other lines that are already run by competitors of DB Regio, a subsidiary of the successor of the former state monopolist. Our analysis shows that larger networks are less likely to be won by the competitors. Also, more recent auctions have been won by competitors more frequently than earlier auctions. Other control variables such as the duration of the contract and the adjacency to other lines run by entrants are insignificant.Competition for the market, liberalization, passenger railways, procurement auctions

Social Interactions in Unemployment

This paper studies the relevance of social interactions among the unemployed. Identification is based on a salient and selective extension of the potential duration of unemployment benefits. If social interactions are important, this policy change affects entitled individuals not only directly, but also indirectly by altering the duration of unemployment in the reference group. Moreover, this spillover effect of the policy should also be observed in the non-entitled group. Results indicate that there are strong indirect effects on the entitled, strong positive spillovers on the non-entitled, and the social interactions are about as important as the direct effects of the policy change.social interactions, social multiplier, unemployment, quasi-experiment

Applying for jobs: Does ALMP participation help?

This paper calculates the impact of Active Labour Market Programmes through the use of three new indicators measuring the application performance of the unemployed. These indicators can be measured repeatedly and therefore allow the usage of Panel Regression methods, cancelling out any unobserved individual heterogeneity. To implement the new approach, data on 30,000 applications has been collected. Using this data, a large positive effect for unemployed with a long term unemployment forecast was estimated. For unemployed without such a forecast, the effect is much smaller. The paper also shows that the new evaluation approach fulfils the requirements of a good controlling instrument: It is accurate, detailed, non-intrusive, inexpensive and therefore easy to keep up to date, easy to understand and communicate.Evaluation, treatment effect, active labour market program, job search

Parental Leave and Mothers' Careers:The Relative Importance of Job Protection and Cash Benefits

Job protection and cash benefits are key elements of parental leave (PL) systems. We study how these two policy instruments affect return-to-work and medium-run labour market outcomes of mothers of newborn children. Analysing a series of major PL policy changes in Austria, we find that longer cash benefits lead to a significant delay in return-to-work, particularly so in the period that is job-protected. Prolonged parental leave absence induced by these policy changes does not appear to hurt mothers' labour market outcomes in the medium run. We build a non-stationary model of job search after childbirth to isolate the role of the two policy instruments. The model matches return-to-work and return to same employer profiles under the various factual policy configurations. Counterfactual policy simulations indicate that a system that combines cash with protection dominates other systems in generating time for care immediately after birth while maintaining mothers' medium-run labour market attachment

Do Wages Compensate for Workplace Disamenities?

Adam Smith's idea that the wage structure reflects differences in work conditions is a central tenet of modern competitive theory of the labor market. However, the empirical relevance of this theory of equalizing differences remains unclear. This paper suggests a novel test for compensating wage differentials based on job satisfaction and wages. If wages differentials solely reflect compensation for work conditions, workers will not prefer jobs with high wages to jobs with low wages. Moreover, this new test allows discussing whether industry and firm size wage differentials reflect rents or compensate for work conditions. Results indicate that wage differentials do not exclusively reflect compensation for work conditions

Social Interactions in Unemployment

This paper studies the relevance of social interactions among the unemployed. Identification is based on a salient and selective extension of the potential duration of unemployment benefits. If social interactions are important, this policy change affects entitled individuals not only directly, but also indirectly by altering the duration of unemployment in the reference group. Moreover, this spillover effect of the policy should also be observed in the non-entitled group. Results indicate that there are strong indirect effects on the entitled, strong positive spillovers on the non-entitled, and that social interactions are about as important as the direct effects of the policy change