Carrots, No Stick, No Driver: The Employment Impact of Job Search Assistance in a Regime with Minimal Monitoring and Sanctions

Abstract

This paper uses a high quality administrative longitudinal dataset to assess the impact of an active labour market intervention consisting of referral for interview plus job search assistance with the public employment service in the Republic of Ireland. During the period of the interventions, both job search monitoring and sanctions were virtually non-existent in the country. We found that, relative to a control group that received no public employment service assistance, unemployed individuals that received the interview letter and participated in job search assistance were 11.2 percentage points less likely to have exited to employment prior to 12 months. This result holds when tested against the influences of both sample selection and unobserved heterogeneity bias. The negative treatment impact is attributed to individuals lowering their job search intensity on learning through the activation interview of the lax nature of the activation process in Ireland at that time. The research finds job search assistance being less effective unless combined with other key aspects of the activation process, such as regular job search monitoring and sanctions for non-compliance.