Recherche d'emploi : entre assurance et incitation.

The provision of Unemployment Insurance (UI) is associated with adverse incentive effects caused by moral hazard. Monitoring together with sanctions is one of possible instruments to restore incentives without reducing the unemployment subsidies provided by the UI system. Benefit reductions or interruptions are imposed if unemployed workers do not comply with job search guidelines. This paper investigates the effectiveness of such benefit sanctions in reducing unemployment. We use a simple job search model where the unemployment agency can simultaneously monitor search intensity of unemployed and wage offers rejection. We find that benefit sanctions for job refusals have negative effects on search intensity. Consequently, job offers monitoring can increase the unemployment rate and decrease welfare.