The welfare effects of mandatory reemployment programs: Combining a structural model and experimental data.

TY - JOUR

T1 - The welfare effects of mandatory reemployment programs: Combining a structural model and experimental data.

AU - Maibom, Jonas

PY - 2023/5

Y1 - 2023/5

N2 - This article estimates a model of job search with utility costs and benefits triggered by mandatory reemployment programs. I use data from an experiment that generates exogenous variation in the threat of program participation and an increase in the job finding rate. I calculate the impact of the experiment on worker welfare, and find that participants would be willing to give up 1.5–1.7 weeks of unemployment benefits to avoid participation. These welfare costs vary across workers and are larger for workers with weaker employment prospects. Overall, welfare costs are substantial and therefore important to take into account.

AB - This article estimates a model of job search with utility costs and benefits triggered by mandatory reemployment programs. I use data from an experiment that generates exogenous variation in the threat of program participation and an increase in the job finding rate. I calculate the impact of the experiment on worker welfare, and find that participants would be willing to give up 1.5–1.7 weeks of unemployment benefits to avoid participation. These welfare costs vary across workers and are larger for workers with weaker employment prospects. Overall, welfare costs are substantial and therefore important to take into account.

UR - http://www.scopus.com/inward/record.url?scp=85150777226&partnerID=8YFLogxK

U2 - 10.1111/iere.12621

DO - 10.1111/iere.12621

M3 - Journal article

SN - 0020-6598

VL - 64

SP - 607

EP - 640

JO - International Economic Review

JF - International Economic Review

IS - 2

ER -