Effects of contracting out employment services: Evidence from a randomized experiment

Bennmarker, Helge; Grönqvist, Erik; Öckert, Björn

doi:10.1016/j.jpubeco.2012.12.002

Cited by 46 publications

(44 citation statements)

References 21 publications

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“…The study concerning Australia also provided evidence for a greater cost‐effectiveness and a reduced quality of services. In Sweden, contracting‐out improved employment rates of migrants in the short run but reduced them for participants younger than 25 years (Bennmarker, Grönqvist, & Öckert, ). In France, assignment to private providers was ineffective at the beginning of the counselling period, but showed positive employment effects after 6 months (Behaghel, Crépon, & Gurgand, ).…”

Section: Previous Researchmentioning

confidence: 99%

Free, free, set them free? Are programmes effective that allow job centres considerable freedom to choose the exact design?

2019

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Active labour market programmes are expected to be quite effective if job centres have a substantial degree of freedom to deliver tailor‐made individual services. For Germany, we studied the effectiveness of Schemes for Activation and Integration (SAI), which were introduced in 2009 to grant such freedoms to implement short training and private placement services. We estimated SAI participation effects on welfare recipients’ earnings and employment rate using propensity score matching and rich administrative data. We distinguished between participation in in‐firm training or training in other settings, and considered effect heterogeneity by gender, region and non‐employment duration. Participation substantially improved the participants’ earnings and employment rate, in‐firm training more so than training in other settings. Our employment effect estimates were not considerably larger than those previously found for comparable pre‐reform programmes. A lack of experience with SAI and a still inadequate client focus in the period studied might explain this.

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Section: Previous Researchmentioning

confidence: 99%

Free, free, set them free? Are programmes effective that allow job centres considerable freedom to choose the exact design?

2019

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“…28 The evidence is mixed for the costs of student transportation (for which reliable quality data has been unavailable). A Swedish study of employment placement by Bennmarker et al (2009) is particularly interesting in that it applies random selection of unemployed persons to private or public placement agencies. The study finds that unemployed clients are more satisfied with private placement agencies, but that there is no difference in labor market outcomes in the aggregate between these two forms of agencies.…”

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confidence: 99%

Outsourcing Public Services: Ownership, Competition, Quality and Contracting

Андерссон

Jordahl

2011

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in A B S T R A C TWe survey the literature on the effects of public sector outsourcing. Guided by theory, we systematically arrange services according to the type and magnitude of their contractibility problems. Taken as a whole, the empirical literature indicates that public sector outsourcing generally reduces costs without hurting quality. This is clearly the case for "perfectly contractible services" like garbage collection, but outsourcing often seems to work reasonably well also for some services with more difficult contracting problems, e.g. fire protection and prisons. Outsourcing seems to be more problematic for credence goods, with residential youth care as the prime example. In contrast to previous reviews, we conclude that ownership and competition appear to be about equally important for the consequences of public sector outsourcing.JEL classification: D23, H11, L33

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“…Theoretically, there are many potential benefits, and reasons for the growing interest, in contracting-out ALMP services. First, it is recognized that private companies are more flexible and service-oriented than public institutions (Bernhard and Wolff, 2008) and have a stronger motivation to invest in cost-saving technologies and innovations that improve the quality of services provided (Bennmarker et al, 2013). Secondly, public institutions can use private companies to expand the range of services provided, use the specialist skills of potential suppliers, and provide access to services not available in the public sector (Finn, 2011).…”

Section: Literature Reviewmentioning

confidence: 99%

What Works for Disadvantaged Unemployed: Private or Public ALMP Services? Evidence from Poland

Gajderowicz¹,

Jakubowski²

2019

ERSJ

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This paper aims to assess the effectiveness of public vs. private active labour market policies (ALMP) for disadvantaged unemployed. The literature on the efficiency of contracting-out ALMP services by public institutions is not consistent. Formalism and limited scope of possible actions in public institutions stand in the way to activation of the less promising unemployed. On the other hand, contracted-out companies work as a blackbox and are paid a success fee. Design/Methodology/Approach: We used (conducted by accident) Randomised Control Trial evaluation of the contracting-out ALMP services program in Poland. We used public registers data from Poland. Findings: We found a strong positive effect of support provided by contracted private agencies. This effect was found to be the strongest among the most dismissed groups of the unemployed. Practical Implications: Study shows that success-fee for external institutions and lack of hard frames assures incentives compatibility that results in real improvement of the unemployed situation, even a year after the end of the intervention. This conclusion should result in adjustments in active labour market policy. Originality/Value: The uniqueness of the study lies in scale of the RCT experiment and robustness of conculusons. The golden standard of evaluation allowed for gaining indisputable evidence on the effectiveness of particular ALMP instrument. Without this kind of analysis, public decisions can turn out to be wrong and lead to the closure of effective programmes (as it happened with contracting-out ALMP services), and investment in programmes that do not provide any effective support for those in need.

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Effects of contracting out employment services: Evidence from a randomized experiment

Cited by 46 publications

References 21 publications

Free, free, set them free? Are programmes effective that allow job centres considerable freedom to choose the exact design?

Free, free, set them free? Are programmes effective that allow job centres considerable freedom to choose the exact design?

Outsourcing Public Services: Ownership, Competition, Quality and Contracting

What Works for Disadvantaged Unemployed: Private or Public ALMP Services? Evidence from Poland

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