Is the Notification of Monitoring a Threat to the Unemployed? A Regression Discontinuity Approach

In July 2004, the Belgian government intensified monitoring within the Unemployment Insurance scheme. Workers claiming unemployment benefits for more than 13 months are notified that past job-search behavior will be monitored 8 months later. In one region the target group is counselled shortly after the notification, while in others not or only once the monitoring has taken place. We exploit the discontinuity in the treatment assignment at the age of 30 to evaluate the threat effect of the notification on the probability of employment. We find that the effect is heterogeneous and critically depends on whether and when notified workers are counselled.evaluation, monitoring job-search, threat effect, regression-discontinuity

The Threat of Monitoring Job Search. A Discontinuity Design

Since July 2004 the job search effort of long-term unemployed benefit claimants is monitored in Belgium. We exploit the discontinuity in the treatment assignment at the age of 30 to evaluate the effect of a notification sent at least 8 months before job search is verified. The threat of monitoring increases transitions to employment, but of lower quality. In the less prosperous region, Wallonia, the impact is smaller, despite of the presence of specific counseling for the notified workers, and more heterogeneous. Moreover, in this region, the threat induces women to substitute sickness for unemployment benefits.evaluation, monitoring job-search, threat effect, regression-discontinuity, grouped data

A New Light into Regional Unemployment Disparities in Belgium : Longitudinal Analysis of Grouped Duration Data

In this paper, we invesitgate whether the diverging evolution of unemployment in the two main regions of Belgium, Flanders and Wallonia, is driven by different evolutions in their average unemployment duration and/or their unemployment incidence. To that purpose, we proceed in two stages. In the first stage, we estimate a mixed proportional hazard model by region, and decompose variations in the aggregate outflow rate over calendar time between a general effect, i.e. changes in the exit rate of all currently unemployed, and a composition effect, i.e. fluctuations in the average quality of entrants. We also specify a non-proportional model to check whether the general effects is the same for unemployed workers with different schooling levels and sub-region of living, in each region. In the second stage, we decompose variations of the unemployment stock in Flanders and Wallonia into an incidence effect and the duration effect estimated in the first stage. We base our analysis on yearly exit probabilities of male workers aged 25-44 and flowing into unemployment in June, each year from 1972 to 1992. The use of aggregate data covering 21 years and stratified by a set of relevant characteristics allow us to control for changes in the inflow composition without relying (completely) on functional form assumptions.Unemployment duration; unemployment incidence;business cycle;composition effect

The Threat of Monitoring Job Search: A Discontinuity Design

Since July 2004 the job search effort of long-term unemployed benefit claimants is monitored in Belgium. We exploit the discontinuity in the treatment assignment at the age of 30 to evaluate the effect of a notification sent at least 8 months before job search is verified. The threat of monitoring increases transitions to employment, but of lower quality. In the less prosperous region, Wallonia, the impact is smaller, despite of the presence of specific counseling for the notified workers, and more heterogeneous. Moreover, in this region, the threat induces women to substitute sickness for unemployment benefits.evaluation, monitoring job-search, threat effect, regression-discontinuity, grouped data

Duration and Calendar Time Dependence of the Exit Rate out of Unemployment in Belgium. Is it True or Spurious?

In this paper, we investigate what causes the aggregate exit rate out of unemployment estimated in Wallonia (Belgium) to decline over duration and to vary over calendar time. For that purpose, we specify a mixed proportional hazard (MPH) model where the mixing distribution depends on seasons and business cycle at the time of entry. Given its too restrictive nature, we relax the proportionality assumption in three ways. First, we allow the baseline hazard to vary non-proportionally between a boom and a recession in order to test the ranking hypothesis. Second, the variance of the mixing distribution needs not to fluctuate proportionally to its mean over calendar time at entry. Finally, we allow for random deviations from the MPH framework by introducing random cohort-specific business cycle effects at the time of exit. We estimated our model by Minimum Chi-Squares on quarterly data of male workers entering unemployment between June 1989 and February 1994. We find that the negative duration dependence of the aggregate exit rate is largely spurious. Moreover, for prime-aged, but not for young male workers, true duration dependence varies over the cycle, a finding consistent with employers ranking candidates according to unemployment duration in their recruitment decision. Changes in the composition of workers entering unemployment explain an important part of the seasonal variation of the exit rate, but not of its variation over the business cycle.Unemployment duration; ranking; heterogeneity; business cycle; seasons

IIs the Notification of Monitoring a Threat to the Unemployed ? A Regression Discontinuity Approach

In july 2004, the Belgian government intensified monitoring within the Unemployment Insurance scheme. Workers claiming unemployment benefits for more than 13 months are notified that past job-search behavior will be monitored 8 months later. In one region the target group is counseled shortly after the notification, while in others not or only once the monitoring has taken place. We exploit the discontinuity in the treatment assignment at the age of 30 to evaluate the threat effect of the notification on the probability of employment. We find that the effect is heterogeneous and critically depends on whether and when notified workers are counseled.evaluation; monitoring job-search; threat effect; regression-discontinuity

Evolution du chômage en Wallonie : la fin des illusions

Le chômage en Wallonie a-t-il été épargné par la récession économique ? Jusqu’il y a peu, on a pu le croire. Comme on peut à présent le constater, ce n’était qu’une illusion statistique !

Counseling the unemployed : does it lower unemployment duration and recurrence ?

This article evaluates the effects of intensive counseling schemes that are provided to about 20% of the unemployed since the 2001 French unemployment policy reform (PARE). Several of the schemes are dedicated at improving the quality of assignment of workers to jobs. As a result, it is necessary to assess their impact on unemployment recurrence as well as unemployment duration. Using duration models and a very rich data set, we can identify heterogeneous and time-dependent causal effects of the schemes. We find significant favorable effects on both outcomes, but the impact on unemployment recurrence is stronger than on unemployment duration. In particular, the program shifts the incidence of recurrence, one year after employment, from 33 to 26%. This illustrates that labor market policies evaluations that consider unemployment duration alone can be misleading.

Counseling the unemployed: does it lower unemployment duration and recurrence?

This article evaluates the effects of intensive counseling schemes that are provided to about 20% of the unemployed since the 2001 French unemployment policy reform (PARE). Several of the schemes are dedicated at improving the quality of assignment of workers to jobs. As a result, it is necessary to assess their impact on unemployment recurrence as well as unemployment duration. Using duration models and a very rich data set, we can identify heterogenous and time-dependent causal effects of the schemes. We find significant favorable effects on both outcomes, but the impact on unemployment recurrence is stronger than on unemployment duration. In particular, the program shifts the incidence of recurrence, one year after employment, from 33 to 26%. This illustrates that labor market policies evaluations that consider unemployment duration alone can be misleading.unemployment ; active labor market policies ; evaluation ; duration model

Do the Higher Educated Unemployed Crowd out the Lower Educated Ones in a Competition for Jobs ?

This paper proposes a new method to estimate the extent of job competition between workers with different schooling levels. We estimate the structural parameters of a matching function generalised to incorporate crowding out effects. We use flow data out of unemployment containing information on the level of educational attainment of the worker, but not on the level of schooling required by the employer for the job. The method therefore avoids the bias induced by mismeasurement in the educational requirements. Applied to Belgian data, we find evidence of significant crowding out among dismissed workers, particularly at the highest schooling levels.Job competition;crowding out;overeducation;matching function;duration analysis