The Employment and Displacement Effects of Job Counselling : Evidence from the U.S. Unemployment Insurance System

We examine the effects of an experimental job-counseling program targeting Unemployment Insurance (UI) recipients in Nevada both in the context of the Great Recession and a strongeconomy. The program reduced UI duration and improved participant employment and earnings in both periods. Effects are partly due to early participant exits (moral hazard effects) and partly due to exits after receiving services (services effects); moral hazard appears more important during a strong market and services more valuable during the recession. We find no evidence that the positive effects of job counseling for participants are accompanied by negative spillover effects for nonparticipants