Counseling the Unemployed : Does it Lower Unemployment Duration and Recurrence ?

This article evaluates the effects of intensive counseling schemes that are providedto about 20% of the unemployed since the 2001 French unemployment policy reform(PARE). Several of the schemes are dedicated at improving the quality of assignmentof workers to jobs. As a result, it is necessary to assess their impact on unemploymentrecurrence as well as unemployment duration. Using duration models and a very richdata set, we can identify heterogenous and time-dependent causal effects of the schemes.We find significant favorable effects on both outcomes, but the impact on unemploymentrecurrence is stronger than on unemployment duration. In particular, the program shiftsthe incidence of recurrence, one year after employment, from 33 to 26%. This illustratesthat labor market policies evaluations that consider unemployment duration alone canbe misleading.