Employability-Driven Effect Heterogeneity

Picture this

Think of an integration agreement like a mandatory study schedule given to students. High-performing students who would study effectively on their own derive no benefit and may feel needlessly restricted, whereas struggling students who lack momentum get the structure and external push needed to achieve results.

What the evidence says

For job seekers with low employability (predicted median duration exceeding 6 months), assignment to an early integration agreement (month 1 or 3) increased the 1-year re-employment probability from 45% (month 6 reference group D) to 53% (group A) and 54% (group C) (p < 0.01), representing an 8 percentage point or 18% relative increase; for high-employability job seekers, early integration agreements had no statistically significant effect (82% vs 82–83%).

Who was studied

N = 4,163 male unemployment insurance benefit recipients aged 25–64 in Germany (1,688 high employability; 2,475 low employability).

How

Individual-level randomized controlled trial across five regional labor market agencies, stratifying individuals by predicted median unemployment duration calculated from a pre-experimental 2011 inflow sample of 55,545 individuals.

What to do

Profile newly registered job seekers using predictive labor market duration models and restrict mandatory integration agreements to individuals classified as having low employability while granting immediate job search autonomy to those with high prospects.

From the source

"On average, among those with low employability, being assigned to an early IA increases the probability of re-employment within a year by about 8 percentage points, from 45% to 53% (so the relative increase is 18%)."

Mandatory_integration_agreements_for_unemployed_job_seekers_a_randomized.pdf

Tags

• ALMP
• RCT
• Employability
• Germany
• Heterogeneous Effects