A1 Refereed original research article in a scientific journal

The Decentralization of Public Employment Services and Local Governments’ Responses to Incentives




AuthorsNieminen Jeremias, Kanninen Ohto, Karhunen Hannu

PublisherOxford University Press

Publication year2023

JournalJournal of Economic Geography

eISSN1468-2710

DOIhttps://doi.org/10.1093/jeg/lbad027

Web address https://doi.org/10.1093/jeg/lbad027

Self-archived copy’s web addresshttps://research.utu.fi/converis/portal/detail/Publication/181258071


Abstract

We examine how the decentralization of public employment services (PES) affects the behavior and service provision of PES offices and the labor market outcomes of job seekers. We use difference-in-differences, utilizing a Finnish temporary reform during which PES were decentralized for specific groups of job seekers in treated municipalities and remained centralized for others. The reform presented the treated municipalities with the possibility of shifting costs to the central government. We find no evidence of better labor market outcomes and find evidence consistent with municipalities being able to shift 10% of their unemployment benefit costs to the central government.


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Last updated on 2025-27-03 at 21:57