The Effects of Major Public Employment Service Interventions in the Job Placement Process

Placing job-seekers to job vacancies and counseling provided by the Public Employment Service (PES) are complex processes. They cover a broad variety of activities designed to influence the job search strategies and employability of the unemployed. This study sheds light on the impact of several important rules or measures on transitions into employment and out of the labour force. The empirical results suggest that job search assistance, for example in the form of placement offers, is effective in enhancing the employment prospects of the unemployed. By contrast, more pressure to take up a job has little potential in boosting employment. An increase in potential unemployment insurance benefit duration leads to longer unemployment, because workers remain in the unemployment system and receive benefits longer instead of withdrawing from the labour force. A shorter benefit entitlement, as well as a more intensive use of sanctions cannot be expected to trigger faster transitions to employment, but would rather cause more exits from the labour market. The results further indicate that there is a possible trade-off between rapid reintegration and the quality of jobs taken up by job-seekers.