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Does housing tenure affect the response of claimants to stricter job search requirements? Evidence from the UK Jobseeker's Allowance
This paper investigates the relation between job search behaviour and housing tenure, exploiting exogenous variation in job search requirements for benefit eligibility introduced by the UK Jobseeker’s Allowance (JSA). Labour Force Survey data are used to estimate JSA’s impact on the combination of claimant status and search intensity. Many claimants leaving the register without entering employment are found to keep searching with higher intensity, revealing preference for independent search. Decomposing the treatment effect by housing tenure, it is found that the JSA increased the probability to find a job among mortgagers; it also induced a significant claimant outflow for renters, but not for outright owners, and significantly less for mortgagers. This can be due to a different search behaviour of homeowners, either because of higher initial levels of search (mortgagers) or because of higher propensity to adjust search to new requirements (outright owners). Among unemployed stopping claiming benefits, many renters decreased their search effort, but many others increased it, similarly to mortgagers. These findings suggest that tighter enforcement of search requirements led many unemployed to abandon the system despite commitment to look for work, contrary to the stated rationale for the policy design.
Paolo Paruolo is a Scientific Officer at the European Commission's Joint Research Centre (JRC), in Ispra, Varese, Italy. He works for the Centre for Research on Impact Evaluation (CRIE). He is an Econometrician with interest in theoretical and applied Econometrics and in Counterfactual methods. He received a Master in Economics and Statistics (University of Bologna, 1987) and a PhD in Theoretical Econometrics - Mathematical Statistics (University of Copenhagen in 1995). He has served as Assistant and the Associate professor of Econometrics (University of Bologna, 1989-1999), as Full Professor of Econometrics (University of Insubria, 1999-2013), and joined the JRC in 2013.
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