Should Local Public Employment Services be Merged with the Local Social Benefit Administrations?



the organisational variables based on the standard matching function estimated according to
equation (1). The OLS regression results, which are very similar to the IV regression results,
are given in Table A2 in the Appendix.

First, we include in column 2 a dummy variable for regions that use a specialised case
management approach. An organisation is characterised as having a specialised case
management approach if long-term unemployed are profiled according to their labour market
chances and those in need for support are counselled by special case managers. As shown in
Table 4, 75.8 % of Joint Local Agencies and 24.6 % of Approved Local Providers use a
specialised case management approach. The remaining 24.2 % of Joint Local Agencies and
75.4 % of Approved Local Providers use a generalized case management, where all long-
term unemployed are coached equally and independently of their profiling outcome. The
coefficient for the specialised case management approach in column 2 shows a negative and
significant correlation between the specialised case management approach and the job
finding rate. The magnitude of the coefficient suggests that long-term unemployed that are
cared for by job centres with a specialised case management approach have on average an
8 % lower job finding rate. In addition, the coefficient for the indicator variable for regions
with Approved Local Providers becomes statistically significant and even more negative.
This pattern suggests that Approved Local Providers have primarily chosen the more
successful generalised case management approach.

In column 3 we include two dummy variables that characterise how vacancies are
recruited and how well the matching process of long-term unemployed to job vacancies is
integrated into the case management approach. The first dummy variable indicates whether
or not a job centre has its own vacancy recruitment service. As shown in Table 4, 16.6% of
Joint Local Agencies have their own vacancy recruitment service. This is substantially lower
than the 89.9% of Approved Local Providers that have their own vacancy recruitment
service. Job centres without their own vacancy recruitment service use the vacancy
recruitment service of the local public employment service that is still responsible for short-
term unemployed. Although the positive correlation between the existence of an own
vacancy recruitment service and the job finding rate of long-term unemployed is not
statistically significant, it still suggests that long-term unemployed that use the vacancy
recruitment service of the local public employment service face in-house competition of
short-term unemployed and therefore have on average a 10 % lower job finding rate. Again,
the fact that Approved Local Providers have primarily chosen the better performing
institutional setting can explain why they did not want to be merged with the local public
employment service, where they had less influence in shaping the job centre organisation
according to their agenda.

15



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