Evaluating the Employment Impact of a Mandatory Job Search Programme

This Paper exploits area-based piloting and age-related eligibility rules to identify treatment effects of a labour market program – the New Deal for Young People in the UK. A central focus is on substitution/displacement effects and on equilibrium wage effects. The programme includes extensive job assistance and wage subsidies to employers. We find that the programme significantly raised transitions to employment by about five percentage points (about 20% over the pre-program base). The impact is robust to a wide variety of non-experimental estimators. We present some evidence suggesting that this effect may not, however, be as large in the longer run.