How Effective Are State Employment Agencies? Jobcentre Use and Job Matching in Britain

Abstract

State sponsored employment agencies are an important source of job matching in Britain. This study tracks Jobcentre use in Britain over the previous decade and the effectiveness of Jobcentre use in securing entry into employment for those who utilise its services. Amongst the unemployed, use of Jobcentres is highly counter‐cyclical. This can be attributed principally to the changing composition of the stock over the economic cycle. In good times, there are relatively more short duration, voluntary quits in the stock, who tend to rely on Jobcentres least. Jobcentres are found to have a significant positive effect on the job entry rates of its clients. The greatest beneficial impact is amongst those, the low skilled and the long term unemployed with the lowest exit rates from unemployment.

Understanding the Role of the Public Employment Agency

“…This suggests that workers hired through the PEA are regarded as qualified and experienced as workers hired through the private market. 15 In Table 12 in the Appendix we show that this result holds for all subgroups.…”

“…We also control for for sample selection into PEA use. Using the British Labour Force Survey Gregg and Wadsworth (1996) find that PEA use is highest among less skilled and long-term unemployed workers. Holzer (1988) year-, region-, occupation-, and industry-fixed effects as well as for year and region interaction terms, which capture all trends on the regional level.…”

“…First, workers are homogeneous in Pissarides (1979), while the key ingredient of our model is that 4 See Holzer (1988) and Blau and Robins (1990) for the US, Osberg (1993) for Canada and Gregg and Wadsworth (1996) for the UK.…”

Neighborhood quality and labor market outcomes: Evidence from quasi-random neighborhood assignment of immigrants

“…Widespread use of friends, relatives and acquaintances to search for jobs is a stylized fact (Rees, 1966;Granovetter, 1974Granovetter, , 1995Holzer, 1988;Blau and Robins, 1990;Montgomery, 1991;Gregg and Wadsworth, 1996;Topa, 2001;Addison and Portugal, 2002;Wahba and Zenou, 2005;Bentolila, Michelacci and Suárez, 2010;Pellizari, 2010).…”

Intermediation Services and Search Frictions

“…The economic literature has so far been silent on this issue. Blau and Robins (1990) for the US, Osberg (1993) for Canada, Gregg and Wadsworth (1996) for the UK, and Addison and Protugal (2002) for Portugal, who analyze the effect of the PEA search channel on the job finding rate, did not intend to separate the effect on individual search effort (which together with the job contact rate determines the job finding rate). Fugère et al (2009) instead study the effect of the PEA on the job finding rate using a structural partial search equilibrium model which assumes that the PEA crowds out private search incentives.…”