Is contracting-out intensified placement services more effective than in-house production?

Abstract

"There is a longstanding debate on the advantages of quasi-markets for placement services for the unemployed compared to a public deliverance of such services. In Germany, the insurance-funded branch of the Public Employment Service (PES) usually assigns hard-to-place unemployed persons to private providers of intensified placement services after some months of unemployment. During 2009, a randomized field experiment has been implemented to investigate if such services might more effectively be provided in-house by the PES. We present first results from this experiment and show that half a year after random assignment, in-house provision resulted in a significantly lower share in unemployment and significantly fewer cumulated days in unemployment. The positive effect arises from exits into employment as well as from withdrawals from the labor market. However, in particular non-benefit recipients of in-house services withdraw more often from unemployment without finding a job." (Author's abstract, IAB-Doku) ((en))

Cite article

Krug, G. & Stephan, G. (2011): Is contracting-out intensified placement services more effective than in-house production? Evidence from a randomized field experiment. (LASER discussion papers 51), Erlangen, 25 p.