Home Work: Exploring the Labor Market Effects of Subsidizing Domestic Services (with Ilan Tojerow), Labour Economics, 2024, vol. 90.
This paper analyzes subsidies for the domestic services sector, an increasingly popular policy to create employment opportunities for low-skilled workers. Using Belgian administrative data, a differences-in-differences approach, and a shift-share instrumental variable, we estimate the local effects of the policy in targeted industries as well as overall effects on the labor market. We find that domestic service subsidies can increase female employment in the subsidized industries as well as the overall employment rate. This increase in employment is primarily driven by an increase in (formal) labor market participation and, to a lesser extent, a reduction in the rate of participation in unemployment insurance and in other social welfare programs. We also find that these subsidies can lead to an increase in the rate of work incapacity, likely due to the fact they broaden the population that can access the social safety net.
[Featured in La Libre and this short video]
Previously circulated as IZA Discussion Paper No. 13544, entitled "Subsidizing Domestic Services as a Tool to Fight Unemployment: Effectiveness and Hidden Costs"
The Consequences of Job Search Monitoring for the Long-Term Unemployed: Disability Instead of Employment? (with Octave De Brouwer and Ilan Tojerow), Journal of Public Economics, 2023, volume 224.
We study the effect of job search monitoring (JSM) on individual labor market outcomes of the long-term unemployed. Exploiting the implementation of a JSM program targeted at jobseekers under the age of 49, we set up a regression discontinuity design that credibly identifies the program’s causal effect on unemployment, employment, and disability insurance (DI) participation and participation in other social welfare programs within a three-year period. We find that JSM increases exits from unemployment to DI without affecting transitions into employment or other social welfare programs. We further find that the effect of JSM on DI materializes before any sanction can be imposed and monitored individuals are still 10 percentage points more likely to be on DI three years after the start of monitoring. Ultimately, exploring fiscal implications reveals that the decrease in unemployment transfers as a result of JSM is entirely offset by the increase in DI transfers.
Previously circulated as IZA Discussion Paper No. 12304, entitled "The Unexpected Consequences of Job Search Monitoring: Disability Instead of Employment?"
Closing the Mismatch: Encouraging Jobseekers to Reskill for Shortage Occupations, IZA Disucssion Paper No. 17731 (with Ilan Tojerow)
In a field experiment involving 100,000 recently unemployed individuals, we investigate how jobseekers' training decisions react to information about labor shortages. The intervention increased training participation by 6%, driven by an increased take-up of transversal programs (+10%) rather than specialized occupational training. Further analyses demonstrate that increases in transversal training take-up are accompanied by shifts in job search strategies toward shortage occupations. These findings suggest that jobseekers react to information on labor shortages by investing in the acquisition of relatively broad skills that may improve their employability across a broader set of sectors and occupations, including those facing labor shortages.
"Do neighbourhoods really shape opportunity? Evidence from non-movers", with Anne Gielen, Olivier Marie and Tommaso Tulkens
Existing research shows that moving disadvantaged individuals to higher opportunity neighbourhoods can yield large economic benefits, yet there exists little evidence on how to improve conditions in the deprived areas these individuals move away from. In this paper, we exploit a Dutch policy that prevented workless individuals with a residency tenure under six years from moving into designated disadvantaged areas, thus producing exogenous variation in the composition of new neighbours for incumbents living in targeted neighbourhoods. The residency tenure criteria further allows us to disentangle work incentive effects faced by low-tenure incumbents threatened of exclusion, from neighbourhood peer effects experienced by long-tenure incumbents who are not at risk of exclusion. We show that within two years, the policy reduced the share of residents receiving welfare benefits by 2.5 percentage points (12.9%), and increased the share employed by 3 pp (5%). The policy also decreased the fraction of residents involved in criminal activities by 0.5 pp (22.7%). These effects are driven by selective entry of residents and behavioural responses of low-tenure incumbents, thus supporting work incentives as the main channel for the observed effects on neighbourhoods. These findings therefore indicate that neighbourhood peer effects are limited for non-movers.
"Unemployed Jobseekers and the Decision to Re-skill: Evidence from a Discrete Choice Experiment", with Benjamine Dejardin, Alexia Delfino, Raffaella Sadun, and Ilan Tojerow
Rapid shifts in labor demand across occupations are intensifying the need for workforce reskilling. Yet, despite potentially large returns, training take-up remains low in many countries. This paper investigates the role of occupational preferences and working conditions in shaping individuals’ reskilling decisions. Using a discrete choice experiment conducted in partnership with a Public Employment Service in Belgium, we elicit the preferences of unemployed jobseekers over training programs that vary in the target occupation, training program attributes, and employer-offered working conditions in the destination job. We find that jobseekers hold strong occupational preferences that act as a significant barrier to retraining outside their preferred occupation. However, reducing the opportunity cost of training — through shorter waiting times, reduced commuting distances, and condensed training duration — can meaningfully increase their willingness to train outside their preferred occupation. We further show that employer-level working conditions, including career evolution prospects, schedule flexibility, work hardship, and salary, also influence this decision. These findings suggest that while policymakers and employers have actionable levers to redirect workers toward shortage occupations, individual occupational preferences constitute a structural constraint that interventions must account for.
"Finding the Perfect Fit: Supporting Unemployed Jobseekers in their Choice of Occupational Training", with Benjamine Dejardin and Ilan Tojerow
We study whether persistently low training take up can be explained by the difficulty of choosing the right program. We develop a tool aimed at helping prospective training participants to identify the occupational trainings that best fit their professional and educational profile. The tool is based on the same philosophy as the transition matrix used in Belot et al. (2019, 2022 and 2025), but provides training recommendations (based on the education, past professional experience, or occupational preferences) rather than occupational job search recommendations. We partner with a Belgian Public Employment Service and its partner Public Training Provider to evaluate the effects of the tool in multiple RCTs. The tool is currently being tested in the field.