ABOUT
The goal of this project is to quantify the importance of caseworkers in driving the labor market outcomes of workers following an unemployment event. Recent research has noted that the consequences of losing a job are highly heterogeneous across workers. Many European countries spend a significant amount of their GDP on active labor market policies. Often, these policies take the form of pairing unemployed workers with a caseworker who provides advice and information on which jobs to pursue or apply for. This paper uses unique administrative data from Austria to measure how much caseworkers impact workers’ job outcomes, like employment, wages, and earnings.
EXPECTED OUTCOMES
Previous research shows that the firm employing the worker before displacement plays an important role in explaining what is likely to happen to the worker following the job displacement event. In particular, if this firm is a high-wage firm (i.e., a firm that tends to pay all its workers well), then it is likely that the displaced worker will suffer large negative consequences from losing the job. While pre-layoff firm characteristics contribute to variability in post-unemployment outcomes, they are not the only factors— caseworkers help unemployed individuals find suitable jobs while minimizing unemployment duration. By isolating the effects of caseworkers from those of the origin firm, this study will focus on the heterogeneity in the post-unemployment matching process driven by caseworkers.
HOW IT RELATES TO THE STONE CENTRE’S MISSION
Unemployment is one of the most traumatic events an individual can experience, with profound and long-lasting effects on various aspects of life. Caseworkers play a key role in making sure that unemployment does not lead to long-term losses of the worker. But how truly important are these caseworkers in shaping post-unemployment labor market outcomes? What makes a “good” vs. a “bad” caseworker? How should we be matching different types of unemployed workers (where type is based on characteristics such as occupation, gender, age, etc.) with different types of caseworkers? This project aims to provide rigorous answers rooted in the most recently advanced econometric techniques to these questions.