Treatment Versus Regime Effects of Carrots and Sticks

Patrick Arni, Gerard J. van den Berg, Rafael Lalive*

*Bijbehorende auteur voor dit werk

OnderzoeksoutputAcademicpeer review

2 Citaten (Scopus)
45 Downloads (Pure)


Public employment service (PES) agencies and caseworkers (CWs) often have substantial leeway in the design and implementation of active labor market policies for the unemployed, and they use policies to a varying extent. We estimate regime effects which capture how CW and PES affect outcomes through different policy intensities. These operate potentially on all forward-looking job seekers regardless of actual treatment exposure. We consider regime effects for two sets of programs, supporting (“carrots”) and restricting (“sticks”) programs, and contrast regime and treatment effects on unemployment durations, employment, and post-unemployment earnings using register data that contain PES and caseworker identifiers for about 130,000 job spells. Regime effects are important: earnings are higher in a PES if carrot-type programs are used more intensively and stick-type programs are used less intensively. Actual treatment effects on earnings have a similar order of magnitude as regime effects and are positive for participation in carrot-type programs and negative for stick-type treatments. Regime effects are economically substantial. A modest increase in the intended usage of carrots and sticks reduces the total cost of an unemployed individual by up to 7.5%.

Originele taal-2English
Pagina's (van-tot)111-127
Aantal pagina's17
TijdschriftJournal of Business and Economic Statistics
Nummer van het tijdschrift1
Vroegere onlinedatum3-aug.-2020
StatusPublished - 2022
Extern gepubliceerdJa


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