Mobility Assistance Programmes for Unemployed Workers, Job Search Behaviour and Labour Market Outcomes

M. Caliendo, Steffen Künn, R. Mahlstedt

Research output: Working paperDiscussion paperProfessional

Abstract

The appealing idea of geographically relocating unemployed job seekers from depressed to prosperous regions and hence reducing unemployment leads to industrialised countries offering financial support to unemployed job seekers when searching for and/or accepting jobs in distant regions. In this paper, we investigate the impact of the existence of these mobility assistance programmes (MAPs) on the job search behaviour of unemployed workers and how this affects their labour market outcomes. While job search theory predicts a shift in individuals’ search effort from local to distant labour markets, consequences for other dimensions of the search behaviour, e.g. reservation wages or the overall search effort, and job-finding probabilities remain theoretically ambiguous. We use survey data on German unemployed job seekers and apply an instrumental variable approach to empirically identify the causal impact of an increased search radius, due to the availability of MAPs, on job search strategies and subsequent labour market outcomes. The results show that the existence of MAPs shifts individuals’ search effort from local to distant regions without
affecting the total number of job applications. The increase in search radius causes a higher geographical mobility and hence higher employment probabilities and wages.
Original languageEnglish
PublisherIZA - Institute for Labour Economics, Bonn
Number of pages51
Publication statusPublished - 2017

Publication series

SeriesIZA Discussion Paper Series
Number11169

JEL classifications

  • j61 - "Geographic Labor Mobility; Immigrant Workers"
  • j68 - Mobility, Unemployment, and Vacancies: Public Policy
  • d04 - "Microeconomic Policy: Formulation; Implementation; Evaluation"
  • c21 - "Single Equation Models; Single Variables: Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions"

Keywords

  • job search
  • active labour market policy
  • labour market mobility
  • instrumental variable approach

Cite this

Caliendo, M., Künn, S., & Mahlstedt, R. (2017). Mobility Assistance Programmes for Unemployed Workers, Job Search Behaviour and Labour Market Outcomes. IZA - Institute for Labour Economics, Bonn. IZA Discussion Paper Series, No. 11169 http://ftp.iza.org/dp11169.pdf