What Works for the Unemployed? Evidence from Quasi-Random Caseworker Assignments, with Anders Humlum and Jakob Roland Munch.
Revised and Resubmitted (2nd round), Journal of Political Economy. NBER working paper.
Popular versions by Becker Friedman Institute and Rockwool Foundation Research Unit. In the media (in Danish): DFF Podcast, Danske A-kasser I, Danske A-kasser II , Information , Ugebrevet A4 , Altinget debat .
Abstract: This paper examines if active labor market programs help unemployed job seekers find jobs using a novel random caseworker instrumental variable (IV) design. Leveraging administrative data from Denmark, our identification strategy exploits that (i) job seekers are quasi-randomly assigned to caseworkers, and (ii) caseworkers differ in their tendencies to assign similar job seekers to different programs. Using our IV strategy, we find assignment to classroom training increases employment by 29% two years after initial job loss of compliers. This finding contrasts with the conclusion reached by ordinary least squares (OLS), which suffers from a negative bias due to selection on unobservables. The employment effects are driven by job seekers who complete the programs (post-program effects) rather than job seekers who exit unemployment upon assignment (threat effects), and the programs help job seekers change occupations. We show that job seekers exposed to offshoring – who tend to experience larger and more persistent employment losses – also have higher employment gains from classroom training. By estimating marginal treatment effects, we conclude that total employment may be increased by targeting training toward job seekers exposed to offshoring.
Job Search, Overoptimism and Statistical Profiling: Can Information Provision Improve Job Search Outcomes? with Nikolaj A. Harmon and Robert Mahlstedt.
Conditionally accepted at The Economic Journal.
Abstract: We estimate the causal effect of a large-scale information provision policy targeting unemployed workers in Denmark. The policy aimed to correct overoptimistic beliefs about reemployment prospects. Identification is based on a regression discontinuity design leveraging age discontinuities in the policy’s statistical profiling tool. When unemployment insurance recipients are informed that they are at high risk of long-term unemployment, their likelihood of exiting unemployment increases significantly. These exits reflect two very distinct mechanisms however: for some jobseekers the information treatment encourages faster job finding, while for others, it discourages job search altogether and shifts them from unemployment into passive support schemes.
Pay and Amenities on the Move, with Anders Humlum and Evan K. Rose
Under review. Related NBER working paper ("Firm Premia and Match Effects in Pay vs. Amenities")
Popular versions by Becker Friedman Institute, The Pie (podcast), Chicago Booth Review.
Abstract: We study pay and amenity tradeoffs using a large-scale survey of job movers linked to administrative data. Although 34% of movers experience pay decreases, only 12% report downgrades in overall job quality. Moves to higher pay are associated with better perks, nicer offices, and greater flexibility, but also more hours, faster work pace, higher layoff risk, and more stress. Eliciting workers’ reservation pay changes to return to their prior jobs, we estimate that non-wage amenities offset about half of the gains from moderate pay increases. These correlations are strongest for voluntary movers, men, and older workers—groups with greater scope for trading off wages against amenities. Tradeoffs persist among movers between the same pair of firms, and pay changes across the firm wage distribution overstate changes in job value by a factor of two. Because workers balance wages against many valuable amenities when switching jobs, pay alone is a poor proxy for moves up or down the job ladder.
Resting projects
Caseworker Quality and Jobseeker Transitions Out of Unemployment