Gross and net effects of employment services

Abstract

"It cannot be taken for granted that fulling a job vacancy via the employment services (or via other job-seeking measures) will lead to additional employment or even to less unemployment. Behind the attempt to measure the gross effect (e.g. in the form of the number of placements matched) always lies the central idea that a greater intervention of the (public as well as private) employment services would be of benefit to the labour market. However, in assessing the efficiency of placements not enough attention has been paid to the fact that the quantitative volume is less important than the net effect for the clients of the employment services and the over-all economy. The decisive question at the micro level, that is, in regard to the clients of the employment services, is, what would have happened to them if they had not used these services? Studies of the net effect of the employment services as a jobseeking route have been rare up to now and can be found solely in North America and a few European countries. The jobseekers themselves unanimously agree that the activities of the public job placement services contribute effectively to the reduction of the length of unemployment. However, in an efficiency comparison with other paths of recruitment for firms, our research shows, on the contrary, that public and private employment services do not always fare well. At the macro level the question must be posed of how the activities of the employment services have affected the overall economic dimensions, such as the level and structure of employment and unemployment. Because the employment services cannot create jobs at the employer level for their clients, their activities result in the redistribution of employment opportunities and unemployment risks to the benefit of their clients. The case for private agents can be justified by their contribution to an improvement of the market allocation and the case for the public employment services by their contribution to the reintegration of hard-to-place groups of persons." (Author's abstract, IAB-Doku) ((en))

Cite article

Walwei, U. (1995): Brutto- und Nettoeffekte der Arbeitsvermittlung. Möglichkeiten und Grenzen der Messung ihres Nutzens für Arbeitsuchende, Betriebe und die Volkswirtschaft. In: Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Vol. 28, No. 4, p. 516-526.