Refine
Year of publication
- 2022 (2) (remove)
Document Type
- Article (1)
- Working Paper (1)
Language
- English (2)
Is part of the Bibliography
- yes (2)
Keywords
- Active Labor Market Policy (1)
- Cardiovascular disease (1)
- Job Search (1)
- Labor Market Mobility (1)
- Search Frictions (1)
- Unintended Consequence (1)
- depression (1)
- drugs (1)
- health (1)
- mental health (1)
- prescriptions (1)
- sanctions (1)
- sickness (1)
- training (1)
- unemployment (1)
Institute
Subsidizing the geographical mobility of unemployed workers may improve welfare by relaxing their financial constraints and allowing them to find jobs in more prosperous regions. We exploit regional variation in the promotion of mobility programs along administrative borders of German employment agency districts to investigate the causal effect of offering such financial incentives on the job search behavior and labor market integration of unemployed workers. We show that promoting mobility – as intended – causes job seekers to increase their search radius, apply for and accept distant jobs. At the same time, local job search is reduced with adverse consequences for reemployment and earnings. These unintended negative effects are provoked by spatial search frictions. Overall, the unconditional provision of mobility programs harms the welfare of unemployed job seekers.
Labor market policies, such as training and sanctions, are commonly used to bring workers back to work. By analogy to medical treatments, exposure to these tools can have side effects. We study the effects on health using individual-level population registers on labor market outcomes, drug prescriptions, and sickness absence, comparing outcomes before and after exposure to training and sanctions. Training improves cardiovascular and mental health, and lowers sickness absence. This is likely to be the result of the instantaneous features of participation, such as the adoption of a more rigorous daily routine, rather than improved employment prospects. Benefits sanctions cause a short-run deterioration of mental health.