Public Employment Services under Decentralization: Evidence from a Natural Experiment

Arbeitspapier

This paper studies whether the decentralization of public employment services (PES) increases job placements among the unemployed. Decentralizing PES has been a widely applied reform used by governments aiming to enhance their efficacy. However, economic theory is ambiguous about its effects, and empirical evidence has been scarce. Using a difference-in-differences design, we exploit unique within-country variation in decentralization provided by the partial devolution of German job centers in 2012. We find that decentralization reduces job placements by approximately 10%. Decentralized providers expand the use of public job creation schemes which diminish job seekers' reemployment prospects but shift costs to higher levels of government.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 7957

Classification and Topics

• Classification: Wirtschaft ; Structure, Scope, and Performance of Government ; State and Local Government: Health; Education; Welfare; Public Pensions ; Welfare, Well-Being, and Poverty: Government Programs; Provision and Effects of Welfare Programs ; Particular Labor Markets: Public Policy ; Unemployment: Models, Duration, Incidence, and Job Search
• Subject: decentralization ; public employment services ; job placements

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Mergele, Lukas ; Weber, Michael
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2019

Further information

• Handle: http://hdl.handle.net/10419/214959
• Last update: 10.03.2025, 11:42 AM CET