Media Briefings

'A Case Worker Like Me': Reducing Unemployment By Matching The Jobless

  • Published Date: December 2010

Carefully matching people who find themselves out of work with job counsellors with whom they can more easily identify could prove a relatively inexpensive way to reduce unemployment. That is the central conclusion of research by DrStefanie Behncke and Professors Markus Frölich and Michael Lechner, published in the December 2010 issue of the Economic Journal.

Their study examines whether the chances of job placements of unemployed individuals improve if they are counselled by case workers who belong to the same social group – as defined by gender, age, education, nationality, mother tongue and the case worker’s own experience of unemployment.

Based on an unusually informative dataset, which links Swiss unemployed to their case workers, the researchers find positive employment effects of about 3 percentage points if the case worker and his or her unemployed client belong to the same social group.

European countries spend billions of euros, pounds, Swiss francs, etc. using active labour market policies to improve the chances of long- and short-term unemployed individuals finding jobs reasonable quickly. Unfortunately, the many sophisticated evaluation studies of these policies conducted over the last decade give a rather mixed indication of their effectiveness.

At a time when the post-crisis level of unemployment remains high and tough budget cuts are being implemented all over Europe, the search for cost-effective measures to foster the reintegration of the unemployed into the labour market becomes an even more pressing task.

This research identifies a workable mechanism that has received little attention and which is comparatively cheap. The mechanism consists of carefully matching unemployed individuals to similar case workers.

For a group of unemployed individuals and case workers that is identical with respect to mother tongue, nationality and unemployment experience, the study shows for the case of Switzerland that the individual employment probability in the labour market can be improved by 3 percentage points when the additional similarity is defined in terms of education, sex and age.

Of course, to obtain this gain for every individual would require a substantial reorganisation of employment offices, as these characteristics are unevenly distributed among the unemployed and their case workers.

But the analysis in this research suggests that even without changing the employment structure of the employment offices – that is, by using existing case workers in existing locations and without changing the level of other more expensive tools aimed at reintegration, such as active labour market policies – these gains could be realised for about one quarter of the unemployed at almost zero cost.

The explanation for these positive effects may relate to phenomena well known from theories of social identity. Although the researchers are not able to test specific elements of such theories in their empirical research design, they suspect that more effective communication as well as trust and cooperation among people with similar background are important aspects.

Results like these have not been found before, mainly because the analysis demands a very rich database, which combines information about case workers with information from their (unemployed) clients. These researchers have built a database by combining information from a survey of all Swiss case workers with rich administrative data on their clients from the unemployment insurance system.

ENDS

Notes for editors: ‘A Caseworker Like Me – Does the Similarity between the Unemployed and their Caseworkers Increase Job Placements?’ by Stefanie Behncke, Markus Frölich and Michael Lechner is published in the December 2010 issue of the Economic Journal.

Michael Lechner is professor of econometrics and director of the Swiss Institute for Empirical Economic Research (SEW) at the University of St. Gallen (homepage: www.sew.unisg.ch/lechner). Stefanie Behncke is at the Swiss National Bank. Markus Frölich is professor of econometrics at the University of Mannheim.

For further information: contact Michael Lechner on +41-71-224-2320 (email:

michael.lechner@unisg.ch); or Romesh Vaitilingam on +44-7768-661095 (email: romesh@vaitilingam.com).