آیا خدمات اشتغال دولتی بر تلاش ها و نتایج جستجو تاثیر می گذارد ؟

In this paper, we examine the disincentive effects of the public employment service on the search effort of unemployed workers and on their exit rate from unemployment. For that purpose, we specify a structural search model with fixed and variable costs of search in which unemployed workers select their optimal search intensity given the exogenous arrival rate of job contacts coming from the public employment agency. Because the theoretical effect of an increase in this exogenous job contact arrival rate on the structural exit rate from unemployment is ambiguous, we estimate this model using individual unemployment duration data. Our results show that the exit rate from unemployment increases with the arrival rate of job contacts obtained by the public employment service, especially for low-educated and low-skilled workers. They also show that the search effort is more costly for low-educated women and low-skilled adult unemployed workers. This last result suggests that a public employment agency that matches searchers and employers is beneficial, in the sense that it saves searchers in terms of search costs they would otherwise bear.

In most countries, the public employment service and its network of local agencies inform unemployed workers of available job vacancies. The services provided by the agencies are usually free to both employers and unemployed workers. For instance, in the year 2005, the French public employment service (Agence Nationale Pour l’Emploi, ANPE) was formed of 813 local agencies employing 24 598 persons (corresponding to 22 841 full-time jobs) all over the country; 86% of these employees were directly in touch with the unemployed workers. During the year 2005, the French public employment service received 3 394 848 job contacts from firms, among which 3 004 415 were transformed into hirings through its intermediary. The same year, the French public employment service managed 14 123 000 interviews with the unemployed workers.1 Most of the job contacts are proposed to unemployed workers either during these interviews or through telephone calls given (and postal mails sent) by employees of the public employment service.2 Since the pioneering work by Pissarides (1979), only a few theoretical studies have proposed search or matching models to investigate the placement role and the efficiency of the public employment service (PES hereafter) in the labor market. For instance, Boone and Van Ours (2004) developed a search model to examine how the PES can change the search effort in the presence of active labor market policies. Using cross-country aggregate data, they estimated a reduced-form model and found a small positive impact of the PES in reducing unemployment rates, but not employment rates. More recently, Plesca (2006) constructed a general equilibrium matching model where search takes place on two channels, the PES search channel and a second channel encompassing all other search methods. The model is calibrated to match the US economy and is used to generate the counterfactual situation in which the PES would not have existed. In this exercise, the PES is found to have substantial wage and unemployment duration effects, heterogeneous across skill levels. Besides these theoretical papers, several empirical studies have examined the effectiveness and the choice of distinct search methods by employed or unemployed job seekers (see, for instance, Holzer, 1987 and Holzer, 1988; Blau and Robins, 1990; Osberg, 1993; Gregg and Wadsworth, 1996; Addison and Portugal, 2002). For example, Gregg and Wadsworth (1996) found that “most job seekers who use Jobcentres (i.e. the public employment agencies) do so as part of a comprehensive search strategy that involves the use of additional, complementary search methods”, but also that “the greatest beneficial impact of Jobcentres is among those, the less skilled and the long-term unemployed, who are more disadvantaged in the labor market”. Using Portuguese data, Addison and Portugal (2002) found that the state employment agency has a low hit rate, and leads to lower paying, shorter lasting jobs. However, these two studies, as the other papers cited above, rely on reduced-form models of job-search behavior. Consequently, interpreting their results is difficult; in particular, these reduced-form studies do not identify the structural components of the unemployment exit rate, namely the individual search intensity and the probability of accepting a job offer. Identification and estimation of these structural components constitute the main objectives of our paper. The theoretical framework of our analysis is a partial equilibrium search model in which any unemployed worker may use two search strategies. The first one is to use the services of the public employment agency, seen as an intermediary between employers offering job vacancies and unemployed workers. The rate at which the PES offers contacts (i.e. information on job vacancies) to unemployed workers may be considered as the output of a production function whose inputs and parameters are determined outside the model. In other terms, any unemployed worker receives contacts through the public employment agency channel at an exogenous rate λoλo.3 However, this rate may depend on the observable individual characteristics (age, education, gender, etc.) of the unemployed. Unemployed workers may also use private (“active” ) search methods, including the use of newspaper advertisements, direct contacts with employers and indirect contacts through friends and relatives. The rate at which the unemployed worker is informed of job vacancies through this “active” channel is an endogenous variable, under the worker's control; strictly speaking, it is the worker's search effort (or intensity).4 This means that this second search strategy is optional, while all searchers use the first strategy. The main question that we address in this paper is the following: How important are the disincentive effects induced by the PES on the individual search effort? In other words, does increasing the number of vacancy contacts offered by the PES cannibalize the private method route by shifting costs? For this problem to be nontrivial, we must assume that, at any given arrival rate of job contacts, private search methods are more costly than the use of the PES. More precisely, we assume that using the PES is costless, while the cost of personal search methods isa positive, increasing function of the individual search effort. Under this maintained assumption, the individual search effort is found to be a decreasing function of the exogenous PES rate of job contacts. However, an increase in the exogenous arrival rate of job contacts through the PES has an ambiguous effect on the rate of exit from unemployment. To clarify this point, we can proceed to the maximum likelihood estimation of our theoretical model by using individual data taken from the INSEE Survey “Suivi des Chômeurs”.5 This survey provides information on the search methods used by unemployed workers, the number of job contacts they obtain through each search channel and the total number of job proposals they got during the months preceding the interview. Results show that an increase in the arrival rate of job vacancies through the public channel implies an increase in the average rate of exit from unemployment, despite the disincentive effects inherent in the model. In this model, the employment agency generates job contacts, but crowds out private search investment. To the extent that a public agency can pool informational resources of private agents, we might think that a centralized employment agency that matches searchers and employers could be beneficial. In particular, the public employment agency may save searchers in terms of search costs they would otherwise bear. These conclusions may be useful compared to results obtained by studies that use data coming from social experiments on job-search assistance programs. In his survey on US unemployment insurance experiments, Meyer (1995) pointed out that intensive job-search assistance increases the individual rate of transition to work. Using also data from UI experiments in the US, Ashenfelter et al. (2005) found that a more intensive monitoring of the search behavior of unemployed workers has no significant effect on the exit rate from unemployment. Results from these experiments have been recently completed by the study conducted by Van Den Berg and Van Der Klaauw (2006). Using data from the Dutch “Counseling and Monitoring” experiment, they conclude that (1) the more intensive the job-search assistance, the higher the exit rate to work and (2) the worse the labor market prospects (individual or macro-economic), the larger the effect of monitoring on the exit rate to work. While we adopt a more structural approach, our main result stays in line with the conclusions of these experimental studies: Increasing the number of job contacts offered by the PES decreases the average duration of individual unemployment spells, especially for low-educated and low-skilled workers. Studies of empirical search models with multiple search channels and endogenous search efforts pose particular problems for theeconometrician. A convincing model must include the joint determination of the search channel (i.e. the choice at the extensive margin) and the search effort (i.e. the choice at the intensive margin). This is precisely what does our model, since it includes both the search decision and the search effort. The search decision is identified from survey data, but the search effort is not measured. Consequently, and that be viewed as an innovative feature of our methodology, estimates of the search effort are obtained in an indirect way that very much depends on the structure of the model. In our data set, a substantial proportion of unemployed workers declares to use only the services of the public employment agency without undertaking any private search. To reconcile theory and the data, we assume that unemployed workers have to incur a random search cost whenever they use private search methods. This random cost is observed by the unemployed worker but not by the statistician. If this cost is higher than a given threshold, whose value is endogenously determined within the model, the unemployed worker does not use the private search channel. The next section introduces our theoretical model that describes the search behavior of unemployed workers. Section 3 presents the data. Section 4 explains the procedure used to estimate the structural parameters from data on search activities of unemployed workers. Section 5 comments on the estimation results.

In a partial equilibrium search model in which the arrival rate of job offers through the PES is exogenous but the personal search intensity is endogenous, the effect of a variation of the exogenous arrival rate has an ambiguous effect on the exit rate from unemployment. Our paper has proved that estimating such a structural model with individual data on search activities of unemployed people helps to remove this ambiguity: An increase in the rate of contacts obtained through the PES channel is estimated to increase the exit rate from unemployment, especially for low-educated and unskilled workers. This result is obtained in spite of a decrease in the optimal search intensity and of an increase in the reservation wage. Estimates also show that the search effort is more costly for low-educated young women and low-skilled adult unemployed workers. This last result suggests that a public employment agency that matches searchers and employers is beneficial, in the sense that it saves searchers in terms of search costs they would otherwise bear.28These conclusions are in line with the conclusions of studies that use data coming from social experiments on job-search assistance programs, in particular those surveyed by Meyer (1995) or those obtained by Van Den Berg and Van Der Klaauw (2006). Moreover, our estimates show that the job arrival rate along the public channel is lower for low-educated young workers and low-skilled unemployed adults.29 However, the probability of transformation of a contact into a hiring proposal is higher for job offers obtained through the PES. High transformation rates through the public channel may be due to the previous selection that case-workers of the PES do among the pool of unemployed workers before initiating a contact with a job vacancy. At the opposite, low transformation rates through the private channel may be due to higher competition among workers applying for posted vacancies. The average duration of jobs found along the public channel is found to be lower only in the case of low-educated (below 26 years old) and low-skilled (above 26 years old) unemployed workers. In other subgroups, the average duration of jobs found along the public channel is either similar or even higher than the average duration of jobs found along the private channel. The distributions of wage offered along the private channel are generally more dispersed than the distributions of wages offered along the public search channel. At all education and skill levels, the proportion of male unemployed workers who search actively is higher than the same proportion for women. Women have lower mean reservation wages than men, and their mean optimal search intensity (when they search) is also lower. The mean reservation wage increases with the UI benefit level, but also with the educational or skill level. The average probability of accepting a wage offer contacted by the PES is often close to one for unemployed workers receiving no UI benefits, and slightly lower for unemployed workers receiving UI benefits. The average probability of accepting a wage offer contacted through the private search channel is generally lower, due to the fact that the left tail of the distribution of wage offers contacted through the private search channel is thicker than the left tail of the distribution of wage offers contacted through the PES. The exit rate from unemployment increases with the educational and skill levels; it is generally much higher for men and for young workers. Finally, let us insist on two limitations of our approach: 1. We have noticed that for men, our model underestimates generally the integrated hazard function of unemployment spell durations, while for women it overestimates frequently this function. These differences may be explained by some nonstationary aspects which are not incorporated in our model (such as exhaustion of UI benefit entitlement, or decreasing arrival rates of job contacts). 2. Our model is probably too partial, since it does not explicitly take into account the use of the different search channels by employers. Indeed, for some categories of workers, it is likely that employers use the personal search channels more frequently, while for others they use mainly the state employment agency. A search equilibrium model could incorporate the situation in which the cost of posting and holding a vacancy in the private search channel is higher. The only way that firms would use the higher cost market is if the value of a filled job were higher there, which might be consistent with a separating equilibrium in which higher (expected) value matches were acquired through this search method.30 Further research should be devoted to build and to estimate search models that incorporate these two features.