Threat Effect of Mandatory Activation
RCTReview
Disentangling the direct benefits of receiving job search assistance (the intensive coaching or training benefit) from the behavioral response caused by the obligation or hassle factor of attending mandatory program activities.
Picture this
Imagine a library imposing a rule where people who check out books for more than two weeks must attend a mandatory daily study workshop at 7 AM. Rather than waking up early for the workshop, many readers quickly return or read their books faster before the deadline arrives. The jump in activity happens because people want to avoid the obligation, not because the workshop itself taught them how to read faster.
What the evidence says
Job exit rates spiked significantly in the weeks leading up to mandatory participation (a "threat effect"), accounting for a substantial share of total job exits before individuals ever received actual coaching or assistance.
- Who was studied
- N = 40,403 Danish job seekers enrolled in unemployment insurance (UI) across treated and control regions.
- How
- Comparison of job exit hazard rates immediately preceding the scheduled mandatory activation week (week 14/26) versus hazard rates during and after activation attendance.
What to do
Evaluate job search assistance programs by measuring job-exit timing relative to program assignment dates to separate mandatory compliance deterrence from skill-building coaching benefits.
From the source
"Part of the positive effect of active labor market programs is due to the 'threat effect' of activation: workers find a job faster just before the activation program starts to avoid participation."
816b5187-9076-4043-aba7-184043b2e524-Estimating Equilibrium Effects of Job Search Assistance.pdf