Devolving public employment services: Preliminary assessment of the Australian experiment

Dockery, Alfred Michael; Stromback, Thorsten

doi:10.1111/j.1564-913x.2001.tb00225.x

Cited by 25 publications

(31 citation statements)

References 9 publications

(6 reference statements)

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“…Compared to the Australian system, these premiums are rather low (see Dockery and Stromback, 2001 The outcome that is of interest for this study is the labor market status in the 9 months after the treatment date. Three statuses are observed: "regular employment" without any subsidies from the employment office, "subsidized employment" which is partially or completely financed by the employment office 11 and unemployment.…”

Section: Datamentioning

confidence: 99%

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Private Job Placement Services - a Microeconometric Evaluation for Germany

Winterhager

2006

SSRN Journal

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Die Discussion Papers dienen einer möglichst schnellen Verbreitung von neueren Forschungsarbeiten des ZEW. Die Beiträge liegen in alleiniger Verantwortung der Autoren und stellen nicht notwendigerweise die Meinung des ZEW dar.Discussion Papers are intended to make results of ZEW research promptly available to other economists in order to encourage discussion and suggestions for revisions. The authors are solely responsible for the contents which do not necessarily represent the opinion of the ZEW.Download this ZEW Discussion Paper from our ftp server:ftp://ftp.zew.de/pub/zew-docs/dp/dp06026.pdf Non-technical summaryContracting out of placement services was introduced in Germany in 2002 to make placement services for unemployed individuals more effective and efficient and thereby reduce frictional unemployment. In principle, a system of private providers can lead to better quality and cost efficiency in placement services by allowing flexibility and introducing competition as well as success based compensation. The government remains the financier and has management and policy control over the type and quality of services to be provided. On the basis of contracts between public job centers and private providers, public caseworkers choose unemployed individuals to send to the private providers who, in turn, try to match the individuals with suitable employment. The remuneration paid to the providers depends mainly on their success rate in placement.The empirical part of this paper analyzes the use of this instrument and its effectiveness from the perspective of the unemployed individuals assigned to a private provider for the complete placement activities, i.e. all the activities necessary to place him in a job. The selectivity of the assignments is taken into account in the microeconometric evaluation study that uses propensity score matching to solve the evaluation problem. The plausibility of the identifying conditional independence assumption is discussed. The highly informative administrative data provided by the Federal Employment Agency minimizes selection on unobservables, so the matched control group is a reliable proxy for the unobserved counterfactual. It is argued that unobserved heterogeneity is small enough to get a negligible bias.The estimated effect of the assignment to private providers on the probability of employment is small and negative: 2.3 to 2.6 percentage points after 2 months. The positive effects on the probability of unemployment are even bigger, up to 7 percentage points. The effects are only temporary, vanishing after some months. On average, the private providers were less successful in placing their clients than the public employment offices at the beginning of 2004. This might be explained by deficits in the contract management. The design of the tender allowed providers who combined low quality with a low price to be awarded the contracts. Information mechanisms did not seem to be effective and the incentive effect of the payment was rather small. The results show a positive rela...

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Section: Datamentioning

confidence: 99%

“…Australia (Dockery and Stromback 2001) and the Netherlands (OECD, 2003, Struyven andSteurs, 2004). If the whole system is changed as in these two countries, it is difficult to evaluate the consequences of such a reform.…”

Section: Introductionmentioning

confidence: 99%

Private Job Placement Services - a Microeconometric Evaluation for Germany

Winterhager

2006

SSRN Journal

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“…(tier 1 provider). Another provider in a different CPA noted the extent of undiagnosed mental health issues amongst JSA claimants: One interesting finding is that whilst the creaming and parking debate, both here and elsewhere, tends to be framed in the language of incentive structures and rational economic behaviour, there is evidence that some parking might arise inadvertently because of the inexperience or inadequate information held by providers and that there might be a learning curve to go through similar to that seen in the Job Network (Dockery and Stromback 2001). One end-to-end provider, for example, described how job advisers within a particular prime might lack the knowledge (and are bowed by pressure from high case loads) to refer jobseekers to appropriate sub-contractors, by implication leaving them to be parked.…”

Section: 'I Think From a Provider Perspective We Are Expected To Priomentioning

confidence: 99%

“…Creaming and parking by providers have long been considered endemic problems within welfare delivery systems involving outsourced provision combined with outcomes-based payments (Finn 2011), and international experience of similar welfare-to-work models highlights the extent of these issues in practice (Heckman et al 2002;Dockery and Stromback 2001;van Berkel and van der Aa 2005;Finn 2011). 'Creaming' refers to providers skimming off clients who are closest to the labour market and targeting services on them in the expectation that they are more likely to trigger an outcome payment.…”

Section: Creaming Parking and Differential Payments In The Work Progmentioning

confidence: 99%

Support for All in the UK Work Programme? Differential Payments, Same Old Problem

Rees¹,

Whitworth²,

Carter³

2015

Contracting‐out Welfare Services

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“…Whereas Australia and the Netherlands use auctions to contract out employment services to private agencies (Dockery/Stromback 2001, OECD 2003, job placement vouchers are a more liberal approach where the unemployed have much consumer sovereignty: they can choose between private agencies. The government launched this new instrument urging the former public placement monopolist to subsidize his private competitors by job placement vouchers.…”

Section: Introductionmentioning

confidence: 99%

Deregulating job placement in Europe: A microeconometric evaluation of an innovative voucher scheme in Germany

2006

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Job placement vouchers may be interpreted as a further step to shift job placement to the private sector. The government launched this innovative instrument urging the former public placement monopolist to subsidize his private competitors. We exploit very rich administrative data provided for the first time by the Federal Employment Agency to apply propensity score matching as a method to solve the fundamental evaluation problem. We find positive treatment effects on the integration into employment between 3.7 percentage points in West Germany and 4.8 percentage points in East Germany and higher deadweight effects in East Germany than in West Germany. JEL Classification: J 68, H 25

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Devolving public employment services: Preliminary assessment of the Australian experiment

Cited by 25 publications

References 9 publications

Private Job Placement Services - a Microeconometric Evaluation for Germany

Private Job Placement Services - a Microeconometric Evaluation for Germany

Support for All in the UK Work Programme? Differential Payments, Same Old Problem

Deregulating job placement in Europe: A microeconometric evaluation of an innovative voucher scheme in Germany

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