The effects of more intensive counseling for disadvantaged unemployed youth

Abstract

Abstract Many European countries are facing the key challenge of integrating low-skilled jobless young people into the labor market. From 2018 to 2020, the Public Employment Service (PES) in Vienna tested a new model of intensified support (“case management”). The target group consisted of young unemployed persons with low formal qualifications who were drawing on social assistance. Based on the pilot project and a propensity matching approach, we show that the increase in staff significantly increased the intensity of the counseling. It led to an increase in job proposals and active labor market program participation, as well as sanctions in the form of benefit suspensions for failure to keep PES appointments. In line with the goal, more of the young people were encouraged to take part in training and further education instead of being quickly placed in an unskilled job. However, in the three-year follow-up period, the intensified counseling did not (yet) have a significant effect on the overall extent of integration into employment. Regarding post-unemployment job quality, we find no effects on wages at the start of a job.