Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/250527 
Authors: 
Year of Publication: 
2021
Series/Report no.: 
IZA Discussion Papers No. 14866
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
This paper estimates a structural model of job search which accounts for utility costs and benefits linked to mandatory reemployment programs. The estimation uses data from a randomized experiment which generates exogenous variation in the threat of program participation. I use the compensating variation (CV) as a measure of the impact of the experimental treatment on worker welfare, the welfare costs. I find that participants would be willing to give up 1.5-1.7 weeks of UI on average to avoid participation in the program, although the program has a positive effect on the job finding rate. Welfare costs vary across workers and are found to be larger for workers with weaker employment prospects. Overall, the analysis shows that the welfare costs are substantial and therefore necessary to take into account when evaluating the case for mandatory reemployment programs.
Subjects: 
active labor market program
activation
job search
unemployment
JEL: 
C9
I3
J64
J65
J68
Document Type: 
Working Paper

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