The Effects of Reducing Mandatory Job Search in Unemployment Insurance

This paper studies the effects of a market-level reduction in job search provided by unemployment benefit recipients. We exploit a market-level policy change in Switzerland, where a subset of Public Employment Services reduced the number of required applications by 25% and abolished mandatory vacancy referrals.

Using detailed administrative data and difference-in-differences designs, we find that the policy change increased the average duration of unemployment spells by about 6%, while increasing average reemployment earnings by about 2%. At the firm side, vacancy filling and posting reduced substantially.

Date

Venue

Registration