Abstract

German unemployed who turned 58 and were registered in the Public Employment Service had until the end of 2007 the option to avoid job-search monitoring without sanction if they agreed to retire as soon as they were eligible for an old age pension. In this study we analyze the impact of job search monitoring on reservation wages of older welfare benefit recipients using as identification strategy age discontinuity in the eligibility rule to participate in the program. Our results indicate that participation in the program increases reservation wages. However, the question whether this has an effect on unemployment duration remains open for further research."