Digital Tools to Facilitate Job Search

Unemployment insurance systems in modern labor markets are riddled with a multitude of rules and regulations governing job seekers' economic situation and their incentives to search for employment. These include, for instance, detailed regulations specifying individuals' benefit level and potential benefit duration, job search requirements, conditions for avoiding benefit sanctions, possibilities for earning extra income or additional benefit entitlements by working in part-time or short-term jobs, etc. The complexity of UI systems makes it challenging for job seekers to understand the prevailing rules, their built-in incentives, and the resulting consequences for their personal economic situation. This is potentially problematic, as a lack of understanding may distort individuals' job search incentives and employment prospects.

In this paper, we report the results from a randomized controlled trial among the universe of registered Danish job seekers that studies how reducing complexity affects individuals' understanding of UI benefit rules and labor market behavior. Our intervention exploits an online information tool that provides individuals with continuously updated, personalized information on their remaining UI benefit period, their accumulated working time that can be used to prolong the potential benefit duration, as well as information on essential rules regarding job seekers' benefit duration and benefit sanctions. We match the data from our experiment with data from an online survey and rich information from administrative records to evaluate the causal effects of our intervention on individuals' understanding of the prevailing labor market rules, their job search behavior, and resulting labor market outcomes.

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