Job Placement via Private vs. Public Employment Agencies: Investigating Selection Effects and Job Match Quality in Germany

Arbeitspapier

Employment agencies aim to match individuals to appropriate jobs. There are public and private employment agencies, which co-exist in many countries. Selection effects may be relevant in the sense that private agencies potentially engage in 'cream-skimming' by prioritizing highly qualified workers. The resulting job match quality is also important from an individual, a firm, and a society perspective. We examine the selection into job placement via private and public employment agencies as well as the resulting job match qualities, taking a job-market reform in Germany into account: the introduction of placement vouchers for private job placements. Using representative German panel data, we find that cream-skimming is significantly less pronounced under the voucher policy, as private agencies shift the focus toward unemployed individuals with a voucher. In addition, we find evidence based on propensity score matching estimations that private agencies tend to create better matches than their public counterparts.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 14024

Classification and Topics

• Classification: Wirtschaft ; Unemployment: Models, Duration, Incidence, and Job Search ; Comparison of Public and Private Enterprises and Nonprofit Institutions; Privatization; Contracting Out
• Subject: cream-skimming ; job match quality ; job placement ; job search ; private employment agencies ; public employment agency ; selection ; vouchers

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Ayaita, Adam ; Grund, Christian ; Pütz, Lisa
• Event: Veröffentlichung
• (who): Institute of Labor Economics (IZA)
• (where): Bonn
• (when): 2021

Further information

• Handle: http://hdl.handle.net/10419/232776
• Last update: 10.03.2025, 11:43 AM CET