To investigate how information provision affects job seekers’ employment prospects and labor market outcomes, Steffen Altmann (University of Copenhagen), Armin Falk (briq and University of Bonn), Simon Jäger (MIT) and Florian Zimmermann (briq and University of Bonn) conducted a large-scale field experiment in the German labor market.
Individuals assigned to the treatment group of the experiment received a brochure that informed them about job search strategies and the consequences of unemployment, and motivated them to actively look for new employment.
The authors studied the causal impact of the brochure by comparing labor market outcomes of treated and untreated job seekers in administrative data containing comprehensive information on individuals’ employment status and earnings.
While the treatment yields overall positive effects, these tend to be concentrated among job seekers who are at risk of being unemployed for an extended period of time. Specifically, the treatment effects in the overall sample are moderately positive but mostly insignificant.
At the same time, the researchers do observe pronounced and statistically significant effects for individuals who exhibit an increased risk of long-term unemployment. For this group, the brochure increases employment and earnings in the year after the intervention by roughly 4%.
Given the low cost of the intervention, our findings indicate that targeted information provision can be a highly effective policy tool in the labor market, the authors conclude.
[Read the press release in German]