Private Placement Agency Contracting
Public employment agencies face administrative inefficiencies and caseworker overload, leading governments to outsource job placement and counseling services to private contractor agencies.
Picture this
Hiring a private contractor to manage job search assistance instead of using in-house government staff is like outsourcing IT support to an external firm. However, if the external firm follows the same rigid rules, job seekers experience no extra benefit compared to standard government caseworkers.
What the evidence says
Assignment to private agencies showed negative or non-significant hazard coefficients (-0.08 in Storstrøm and -0.21 in Southern Jutland for treatment group members), failing to improve exit rates over public agency management.
- Who
- N = 4,513 unemployed UI recipients (human, Denmark: Storstrøm and Southern Jutland counties).
- How
- Parametric duration hazard model tracking assignment to private contractors alongside public job agency management.
What to do
Evaluate outsourced private employment services against public agency benchmarks using randomized duration models before expanding private agency contracts.
From the source
"We also know if the treatment of the worker is being handled by case workers in the employment agency or if it has been contracted out to a private agency."
Experimental Evidence on the Nature of the Danish Employment Miracle
Tagged
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