Economic incentives for private providers of job-search assistance

Last registered on February 08, 2022
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Pre-Trial

Trial Information

General Information

Title
Economic incentives for private providers of job-search assistance
RCT ID
AEARCTR-0008848
Initial registration date
February 08, 2022

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published
February 08, 2022, 9:37 AM EST

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Locations

Country
Sweden
Region

Primary Investigator

Name
Johan Vikström
Affiliation
IFAU
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Other Primary Investigator(s)

PI Name
Lisa Laun
PI Affiliation
IFAU
Contact Investigator
PI Name
Martin Söderström
PI Affiliation
IFAU
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PI Name
Johan Egebark
PI Affiliation
Swedish Public Employment Service
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PI Name
Magnus Rödin
PI Affiliation
Swedish Public Employment Service
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Additional Trial Information

Status
In development
Start date
2020-03-01
End date
2023-12-31
Keywords
Labor
Additional Keywords
Job-search, Private providers
JEL code(s)
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
Active labour market policies (ALMP) to combat unemployment are used in most countries. Traditionally, public authorities have conducted these policies, but recently, some countries have contracted out ALMPs to private providers. The intention is to increase cost-efficiency by creating a market, where there are financial incentives for the private providers to perform. This randomized trial examines private provision of job-search assistance in Sweden. We will focus a program named Krom, which is governed by the Swedish Public Employment Services (SPES), but privat companies provide all job-search assistance services to the job seekers who participate in the program. The trial focuses on overall effects of the private provider program and the impact of the compensation scheme, aiming to answer how compensation scheme for the private providers could be designed. Relevant outcomes include e.g. the support given to the job seekers, employment outcomes and job quality.
External Link(s)

Registration Citation

Citation
Egebark, Johan et al. 2022. "Economic incentives for private providers of job-search assistance." AEA RCT Registry. February 08. https://doi.org/10.1257/rct.8848-1.0
Sponsors & Partners

Partner

Name
Arbetsförmedlingen (Swedish Public Employment Service)
Type
government
URL
https://www.arbetsformedlingen.se
Experimental Details

Interventions

Intervention(s)
In March 2020, the Swedish Public Employment Service (Swedish PES) launched a new active labor market program for unemployed workers, KROM. KROM is a program where job-search assistance is given by private providers. The program consists of three different tracks and job seekers are assigned to one of the tracks, based on how closely they are attached to the labor market, as measured by a statistical profiling tool. Unemployed workers not assigned to KROM obtain the standard in-house public job-search assistance. The goal of KROM is to get the participants back to work or education as soon as possible.

The private providers are given different compensation for each jobseeker based on the given track. The compensations are split into a basic compensation, given regardless of the outcome, and a performance-based compensation, given if the jobseeker gains employment or starts education. This trial will evaluate both the overall effect of participating in KROM and the impact of the compensation given to the private provider. This is done comparing the public in-house provision of job-search assistance and private provision within the tree KROM-tracks. The trial will also explore the mechanisms behind any observed effects using various administrative data.
Intervention Start Date
2020-03-01
Intervention End Date
2022-12-31

Primary Outcomes

Primary Outcomes (end points)
We will use administrative data from the Swedish PES and Statistics Sweden. The administrative records from the PES include detailed information on job seeker characteristics along with detailed daily information on unemployment status, participation in active labor market programs and exits from unemployment. The PES data also includes detailed information on service content for the public provider. The PES also collects information from the private providers on the support provided by the private providers. The administrative data from Statistics Sweden includes the LISA database, containing annual information on key labor market outcomes such as labor earnings and income from various insurance schemes. Monthly tax records from the Register-Based Labor Market Statistics (RAMS) contain monthly earnings and employer information.
Primary outcomes of job search: job finding as measured by administrative data from the Swedish PES (such as unemployment duration and employment status) and likelihood of initiating different types of education.
Support given to the job seekers: type and amount of job-search assistance, and support given via labor market programs, including both in-house public support and private support. The outcomes will depend on the exact information collected by the Swedish PES.
Primary Outcomes (explanation)
-

Secondary Outcomes

Secondary Outcomes (end points)
Secondary outcomes of job search: labor earnings and job quality as measured by administrative data from Statistics Sweden (such as monthly labor, wage rate and hours worked).
Secondary Outcomes (explanation)
-

Experimental Design

Experimental Design
The randomized trial uses a series of sub-trials to evaluate the overall impact of private provision of job-search assistance, the impact of the size of the total compensation to the private providers and the design of the basic compensation and the performance-based compensation.

Experimental Design Details
Not available
Randomization Method
Randomization done in office by a computer
Randomization Unit
Individual level randomization.
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
Clustering is not relevant.
Sample size: planned number of observations
The sample size is determined by the Swedish Public Employment Service and not controlled by the evaluation team. The KROM-program and the randomized trial in this project is a part of an ongoing larger active labor market policy in Sweden. We pre-specified the experimental protocol before the trial, but the exact funds available to the program and the trial were not clear when the experiment was launched. We therefore decided that the evaluation sample will consists of everyone that the Swedish Public Employment Service assigns to the trial, without any specific target for the final sample size.
Sample size (or number of clusters) by treatment arms
Unavailable (see above).
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Unavailable (see above).
Supporting Documents and Materials

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IRB

Institutional Review Boards (IRBs)

IRB Name
Etikprövningsmyndigheten
IRB Approval Date
2020-08-10
IRB Approval Number
Dnr 2020-03140
Analysis Plan