[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp9457.html
   My bibliography  Save this paper

Treatment versus Regime Effects of Carrots and Sticks

Author

Listed:
  • Arni, Patrick

    (University of Bristol)

  • van den Berg, Gerard J.

    (University of Groningen)

  • Lalive, Rafael

    (University of Lausanne)

Abstract
Public Employment Service (PES) agencies and caseworkers (CW) often have substantial leeway in the design and implementation of active labor market policies (ALMP) for the unemployed, resulting in variation of usage. This paper presents a novel framework in which this variation is used for the joint assessment of different ways in which ALMP effects can operate. We examine an additional layer of impacts – beyond the treatment effects on the treated job seekers – called regime effects, which potentially affect all job seekers and which are defined by the extent to which programs are intended to be used in a market. We propose a novel method to jointly estimate regime effects for two types of programs, supportive (carrots) and restrictive (sticks) programs. We apply this to contrast regime and treatment effects on unemployment durations, employment, and post-unemployment earnings using register data that contain PES and case-worker identifiers for about 130,000 job seekers. The results show that "carrots" and "sticks" treatments prolong unemployment, but carrots increase earnings whereas sticks decrease them. We find regime effects of a similar order of magnitude. Higher intended usage of carrots and sticks reduces unemployment durations, but carrots raise earnings whereas sticks decrease them. We also find interaction effects between carrots and sticks policies. Regime effects are economically substantial. Our comprehensive cost-benefits analyses show that modest increases in the intended usage of carrots and sticks reduce the total cost of an unemployed individual by up to 10%.

Suggested Citation

  • Arni, Patrick & van den Berg, Gerard J. & Lalive, Rafael, 2015. "Treatment versus Regime Effects of Carrots and Sticks," IZA Discussion Papers 9457, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp9457
    as

    Download full text from publisher

    File URL: https://docs.iza.org/dp9457.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Stefanie Behncke & Markus Frölich & Michael Lechner, 2010. "A Caseworker Like Me - Does The Similarity Between The Unemployed and Their Caseworkers Increase Job Placements?," Economic Journal, Royal Economic Society, vol. 120(549), pages 1430-1459, December.
    2. Lechner, Michael & Scioch, Patrycja & Wunsch, Conny, 2013. "Do Firms Benefit from Active Labour Market Policies?," Working papers 2013/11, Faculty of Business and Economics - University of Basel.
    3. Gerard J. van den Berg & Antoine Bozio & Mónica Costa Dias, 2020. "Policy discontinuity and duration outcomes," Quantitative Economics, Econometric Society, vol. 11(3), pages 871-916, July.
    4. Jaap H. Abbring & Gerard J. Berg & Jan C. Ours, 2005. "The Effect of Unemployment Insurance Sanctions on the Transition Rate from Unemployment to Employment," Economic Journal, Royal Economic Society, vol. 115(505), pages 602-630, July.
    5. Michael Rosholm, 2014. "Do case workers help the unemployed?," IZA World of Labor, Institute of Labor Economics (IZA), pages 1-72, August.
    6. Marc Ferracci & Gr�gory Jolivet & Gerard J. van den Berg, 2014. "Evidence of Treatment Spillovers Within Markets," The Review of Economics and Statistics, MIT Press, vol. 96(5), pages 812-823, December.
    7. repec:hal:pseose:halshs-00840901 is not listed on IDEAS
    8. Patrick Arni & Rafael Lalive & Jan C. Van Ours, 2013. "How Effective Are Unemployment Benefit Sanctions? Looking Beyond Unemployment Exit," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 28(7), pages 1153-1178, November.
    9. Bruno Crépon & Esther Duflo & Marc Gurgand & Roland Rathelot & Philippe Zamora, 2013. "Do Labor Market Policies have Displacement Effects? Evidence from a Clustered Randomized Experiment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 128(2), pages 531-580.
    10. Pavoni, Nicola & Setty, Ofer & Violante, Giovanni L., 2010. "Search and Work in Optimal Welfare Programs," Foerder Institute for Economic Research Working Papers 275749, Tel-Aviv University > Foerder Institute for Economic Research.
    11. David Card & Jochen Kluve & Andrea Weber, 2010. "Active Labour Market Policy Evaluations: A Meta-Analysis," Economic Journal, Royal Economic Society, vol. 120(548), pages 452-477, November.
    12. Markussen, Simen & Mykletun, Arnstein & Røed, Knut, 2012. "The case for presenteeism — Evidence from Norway's sickness insurance program," Journal of Public Economics, Elsevier, vol. 96(11), pages 959-972.
    13. Gerard J. van den Berg & Annette H. Bergemann & Marco Caliendo, 2009. "The Effect of Active Labor Market Programs on Not-Yet Treated Unemployed Individuals," Journal of the European Economic Association, MIT Press, vol. 7(2-3), pages 606-616, 04-05.
    14. Michael Lechner & Ruth Miquel & Conny Wunsch, 2011. "Long‐Run Effects Of Public Sector Sponsored Training In West Germany," Journal of the European Economic Association, European Economic Association, vol. 9(4), pages 742-784, August.
    15. Stefanie Behncke & Markus Frölich & Michael Lechner, 2010. "Unemployed and their caseworkers: should they be friends or foes?," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 173(1), pages 67-92, January.
    16. Rafael Lalive & Jan C. van Ours & Josef Zweimueller, "undated". "The Impact of Active Labor Market Programs on the Duration of Unemployment," IEW - Working Papers 041, Institute for Empirical Research in Economics - University of Zurich.
    17. Richard Blundell & Monica Costa Dias & Costas Meghir & John Van Reenen, 2004. "Evaluating the Employment Impact of a Mandatory Job Search Program," Journal of the European Economic Association, MIT Press, vol. 2(4), pages 569-606, June.
    18. repec:iza:izawol:journl:y:2014:p:72 is not listed on IDEAS
    19. Dehejia, Rajeev H., 2005. "Program evaluation as a decision problem," Journal of Econometrics, Elsevier, vol. 125(1-2), pages 141-173.
    20. Markussen, Simen & Røed, Knut & Røgeberg, Ole J., 2013. "The Changing of the Guards: Can Physicians Contain Social Insurance Costs?," IZA Discussion Papers 7122, Institute of Labor Economics (IZA).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Gerard J. Van den Berg & Iris Kesternich & Gerrit Müller & Bettina Siflinger, 2019. "Reciprocity and the Interaction between the Unemployed and the Caseworker," CESifo Working Paper Series 7947, CESifo.
    2. Amelie Schiprowski, 2020. "The Role of Caseworkers in Unemployment Insurance: Evidence from Unplanned Absences," Journal of Labor Economics, University of Chicago Press, vol. 38(4), pages 1189-1225.
    3. Lalive, Rafael & Cottier, Lionel & Flueckiger, Yves & Kempeneers, Pierre, 2018. "Does Job Search Assistance Really Raise Employment?," CEPR Discussion Papers 13133, C.E.P.R. Discussion Papers.
    4. Eichhorst, Werner & Konle-Seidl, Regina, 2016. "Evaluating Labour Market Policy," IZA Discussion Papers 9966, Institute of Labor Economics (IZA).
    5. Hernæs, Øystein & Markussen, Simen & Røed, Knut, 2017. "Can welfare conditionality combat high school dropout?," Labour Economics, Elsevier, vol. 48(C), pages 144-156.
    6. Arni, Patrick & Egger, Peter & Erhardt, Katharina & Gubler, Matthias & Sauré, Philip, 2024. "Heterogeneous Impacts of Trade Shocks on Workers," IZA Discussion Papers 16895, Institute of Labor Economics (IZA).
    7. Marco Caliendo & Robert Mahlstedt & Gerard J. van den Berg & Johan Vikström, 2023. "Side effects of labor market policies," Scandinavian Journal of Economics, Wiley Blackwell, vol. 125(2), pages 339-375, April.
    8. Hernæs, Øystein M., 2020. "Distributional effects of welfare reform for young adults: An unconditional quantile regression approach," Labour Economics, Elsevier, vol. 65(C).
    9. Caliendo, Marco, 2019. "Health Effects of Labor Market Policies: Evidence from Drug Prescriptions," VfS Annual Conference 2019 (Leipzig): 30 Years after the Fall of the Berlin Wall - Democracy and Market Economy 203573, Verein für Socialpolitik / German Economic Association.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jonas Maibom & Michael Rosholm & Michael Svarer, 2017. "Experimental Evidence on the Effects of Early Meetings and Activation," Scandinavian Journal of Economics, Wiley Blackwell, vol. 119(3), pages 541-570, July.
    2. Michael C. Knaus & Michael Lechner & Anthony Strittmatter, 2022. "Heterogeneous Employment Effects of Job Search Programs: A Machine Learning Approach," Journal of Human Resources, University of Wisconsin Press, vol. 57(2), pages 597-636.
    3. Mergele, Lukas & Weber, Michael, 2020. "Public employment services under decentralization: Evidence from a natural experiment," Journal of Public Economics, Elsevier, vol. 182(C).
    4. Lombardi, Stefano & Skans, Oskar Nordström & Vikström, Johan, 2018. "Targeted wage subsidies and firm performance," Labour Economics, Elsevier, vol. 53(C), pages 33-45.
    5. Oliver Falck & Siegfried Schönherr, 2016. "An Economic Reform Agenda for Croatia: a comprehensive economic reform package prepared for the Croatian Statehood Foundation," ifo Forschungsberichte, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 70, September.
    6. Rüdiger Wapler & Daniel Werner & Katja Wolf, 2018. "Active labour market policies in Germany: do regional labour markets benefit?," Applied Economics, Taylor & Francis Journals, vol. 50(51), pages 5561-5578, November.
    7. Goulas, Eleftherios & Zervoyianni, Athina, 2018. "Active labour-market policies and output growth: Is there a causal relationship?," Economic Modelling, Elsevier, vol. 73(C), pages 1-14.
    8. Marco Caliendo & Ricarda Schmidl, 2016. "Youth unemployment and active labor market policies in Europe," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-30, December.
    9. Cerqua, Augusto & Urwin, Peter & Thomson, Dave & Bibby, David, 2020. "Evaluation of education and training impacts for the unemployed: Challenges of new data," Labour Economics, Elsevier, vol. 67(C).
    10. Mergele, Lukas & Weber, Michael, 2020. "Public employment services under decentralization: Evidence from a natural experiment," Journal of Public Economics, Elsevier, vol. 182(C).
    11. Huber, Martin & Lechner, Michael & Wunsch, Conny, 2013. "The performance of estimators based on the propensity score," Journal of Econometrics, Elsevier, vol. 175(1), pages 1-21.
    12. Kelly, Elish & McGuinness, Seamus & O'Connell, Philip J., 2011. "What Can Active Labour Market Policies Do?," Papers EC1, Economic and Social Research Institute (ESRI).
    13. Blasco, Sylvie & Pertold-Gebicka, Barbara, 2013. "Employment policies, hiring practices and firm performance," Labour Economics, Elsevier, vol. 25(C), pages 12-24.
    14. Marios Michaelides & Peter Mueser, 2018. "Are Reemployment Services Effective? Experimental Evidence from the Great Recession," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 37(3), pages 546-570, June.
    15. Eva m. Berger & Guenther Koenig & Henning Müller & Felix Schmidt & Daniel Schunk, 2017. "Self-Regulation Training and Job Search Effort: A Natural Field Experiment within an Active Labor Market Program," Working Papers 1712, Gutenberg School of Management and Economics, Johannes Gutenberg-Universität Mainz.
    16. Muller, Paul & van der Klaauw, Bas & Heyma, Arjan, 2017. "Comparing Econometric Methods to Empirically Evaluate Job-Search Assistance," IZA Discussion Papers 10531, Institute of Labor Economics (IZA).
    17. Arni, Patrick, 2015. "Opening the Blackbox: How Does Labor Market Policy Affect the Job Seekers' Behavior? A Field Experiment," IZA Discussion Papers 9617, Institute of Labor Economics (IZA).
    18. Amelie Schiprowski, 2020. "The Role of Caseworkers in Unemployment Insurance: Evidence from Unplanned Absences," Journal of Labor Economics, University of Chicago Press, vol. 38(4), pages 1189-1225.
    19. Arni, Patrick & Schiprowski, Amelie, 2019. "Job search requirements, effort provision and labor market outcomes," Journal of Public Economics, Elsevier, vol. 169(C), pages 65-88.
    20. Marco Caliendo & Steffen Künn & Robert Mahlstedt, 2022. "The Intended and Unintended Effects of Promoting Labor Market Mobility," CEPA Discussion Papers 42, Center for Economic Policy Analysis.

    More about this item

    Keywords

    active labor market programs; policy regime; treatment effect; employment; earnings; unemployment; caseworkers;
    All these keywords.

    JEL classification:

    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp9457. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Holger Hinte (email available below). General contact details of provider: https://edirc.repec.org/data/izaaade.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.