Structural Empirical Evaluation of Job Search Monitoring

Gerard J. van den Berg
Bas van der Klaauw

October 2013

We structurally estimate job search models explicitly models with endogenous job search effort and effort monitoring. We use data from a randomized experiment conducted in the Netherlands to evaluate the effectiveness of monitoring. This includes register data on post unemployment outcomes like wages and job mobility, and survey data on measures of search behavior. Monitoring causes unemployed workers to accept jobs of lower quality. Individuals who were exposed to stricter job search monitoring receive on average lower wages and have shorter job durations. Adverse effects of monitoring are mitigated by search channel substitution and on-the-job search. We use the structural estimates to compare monitoring to other policies against moral hazard, like re-employment bonuses and changes in the benefits level.

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Last updated: October 21, 2013.