Labor Economics, Public Economics, Behavioral Economics, Microeconometrics
The Power of Expectations: Anticipation Effects and the Effectiveness of Active Labor Market Policies (Job market paper) [Current Draft]
The presence of labor market programs has been shown to influence the individual behavior of unemployed workers even before they enroll. This paper studies how behavioral adjustments due to these anticipation effects influence the program effectiveness after the enrollment by utilizing a unique dataset that provides information regarding the unemployeds' expectations about a future program participation and realized labor market outcomes. It is shown that program participants in long-term training who do not expect a treatment ex ante have significantly lower long-run employment rates than those participants who expect the treatment. An extensive sensitivity analysis shows that the effect is not induced by differences with respect to the selection into the program, but it can be traced back to individuals who have little contact to their caseworker and show limited flexibility with respect to their job search strategy. The findings emphasize the importance of early and intensive counseling by the caseworker about the possibility of a future treatment and the job search strategy in order improve the effectiveness of labor market programs.
Mobility Assistance Programs for Unemployed Workers, Job Search Behavior and Labor Market Outcomes (with M. Caliendo and S. Künn; IZA Discussion Paper No. 11169)
The appealing idea of geographically relocating unemployed job seekers from depressed to prosperous regions and hence reducing unemployment leads to industrialised countries offering financial support to unemployed job seekers when searching for and/or accepting jobs in distant regions. In this paper, we investigate the impact of the existence of these mobility assistance programmes (MAPs) on the job search behaviour of unemployed workers and how this affects their labour market outcomes. While job search theory predicts a shift in individuals' search effort from local to distant labour markets, consequences for other dimensions of the search behaviour, e.g. reservation wages or the overall search effort, and job-finding probabilities remain theoretically ambiguous. We use survey data on German unemployed job seekers and apply an instrumental variable approach to empirically identify the causal impact of an increased search radius, due to the availability of MAPs, on job search strategies and subsequent labour market outcomes. The results show that the existence of MAPs shifts individuals' search effort from local to distant regions without affecting the total number of job applications. The increase in search radius causes a higher geographical mobility and hence higher employment probabilities and wages.
Work in Progress
Complexity and the Effectiveness of Public Policies (with S. Altmann, S. Cairo and A. Sebald)
Benefit Sanctions, Warning Mechanims and the Role of Personalized Information (with S. Cairo)
Digital Tools to Facilitate Job Search (with S. Altmann, A. Glenny and A. Sebald)
Side Effects of Labor Market Policies: Evidence from Drug Prescriptions (with M. Caliendo, G. van den Berg and J. Vikström)
Predicting the Risk of Long-term Unemployment and Updating Job Seekers' Beliefs (with N. Harmon and M. Rasmussen)