Abstract

A number of investigations show that employees tend to underestimate (i) the duration of unemployment, (ii) the effectiveness of active job seeking, and (iii) the negative consequences of unemployment by the onset of unemployment. This may lead to a low level of effort and own initiative during the job search.
A controlled field study is used to investigate if specific information about the actual consequences of unemployment and the effectiveness of active job seeking are sufficient to increase the intensity of job search and, consequently, reduce the duration of unemployment. For this purpose, an information brochure was developed and sent to a random sample of jobseekers when they entered unemployment. The comparison of this treatment group with a control group of jobseekers who did not get the brochure identifies the causal effect of providing information on the intensity of job search and the duration of unemployment.
Restricting nobody’s freedom of choice, the provision of information belongs to the so-called “soft policy measures”. Such measures are aimed at supporting people in their decision-making when they would reach suboptimal decisions caused by bounded rationality. Findings of other application fields show that “soft policy measures” may have strong effects. This research project will be the first to analyse if comparable measures will as well be effective in labour market policies.