Counseling and Monitoring of Unemployed Workers: Theory and Evidence from a Controlled Social Experiment

Gerard J. van den Berg
Bas van der Klaauw

International Economic Review 47, 895-936 (2006).

We investigate the effect of counseling and monitoring on the individual transition rate to employment. We theoretically analyze these policies in a job search model with two search channels and endogenous search effort. In the empirical analysis we use unique administrative and survey data concerning a social experiment with full randomization and compliance. The results do not provide evidence that counseling and monitoring affect the exit rate to work. Monitoring causes a shift from informal to formal job search. We combine our empirical results with the results from our theoretical analysis and the existing empirical literature, to establish a comprehensive analysis of the effectiveness of these policies.

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Last updated: October 9, 2006.