The employment effect of reforming a public employment agency

By how much does an increase in operating effectiveness of a public employment agency (PEA) and a reduction of unemployment benefits reduce unemployment? Using a recent labour market reform in Germany as background, we find that an enhanced effectiveness of the PEA explains about 20% of the observed post-reform unemployment decline. The role of unemployment benefit reduction explains just about 5% of the observed decline. Due to disincentive effects resulting from the reform, the reform of the PEA could have had an even higher impact on unemployment reduction if there had been less focus on long-term unemployed workers

Behavioral Economics and the Public Sector

This thesis consists of four essays dealing with topics that are relevant for the public sector. The essays cover diverse issues of economics partly overlapping with political science. The topics reach from the taxation of labor over monetary policy to preferences over voting institutions. Throughout this thesis it is, in contrast to classical economics, not assumed that humans are necessarily fully rational. Once full rationality is no longer assumed, experiments become an important tool to learn about human behavior. Consequently, most of the work in this thesis makes use of economic experiments

An expenditure-based estimate of Britain's black economy

We estimate the size of Britain’s black economy (defined narrowly as unreported taxable income) by using income and expenditure data drawn from the 1982 Family Expenditure Survey. Our working assumptions are that all income groups report expenditure on food correctly; employees in employment report income correctly; and that the self-employed under-report their income. We estimate food exependiture equations for all groups and then invert them to arrive at the conclusion that on average true self-employment income is 1.55 times as much as reported self-employment income. This implies that the size of the black economy is about 5.5 percent of GDP. 1

Occupational Change and Mobility Among Employed and Unemployed Job Seekers

We use data from the Labour Force Survey to show that employed and unemployed job seekers in Great Britain originate from different occupations and find jobs in different occupations. We find substantial differences in occupational mobility between job seekers: employed job seekers are most likely to move to occupations paying higher average wages relative to their previous occupation, while unemployed job seekers are most likely to move to lower paying occupations. Employed and unemployed job seekers exhibit different patterns of occupational mobility and, therefore, do not accept the same types of jobs