TY - RPRT AU - Addison, John T. AU - Altemeyer-Bartscher, Martin AU - Kuhn, Thomas TI - The Dilemma of Delegating Search: Budgeting in Public Employment Services PY - 2010/Sep/ PB - Institute of Labor Economics (IZA) CY - Bonn T2 - IZA Discussion Paper IS - 5170 UR - https://www.iza.org/index.php/publications/dp5170 AB - The poor performance often attributed to many public employment services may be explained in part by a delegation problem between the central office and local job centers. In markets characterized by frictions, job centers function as match-makers, linking job seekers with relevant vacancies. Because their search intensity in contacting employers and collecting data is not verifiable by the central authority, a typical moral hazard problem can arise. To overcome the delegation problem and provide high-powered incentives for high levels of search effort on the part of job centers, we propose output-related schemes that assign greater staff capacity to agencies achieving high strike rates. KW - matching unemployment KW - public employment service KW - delegation problem KW - moral hazard KW - search theory ER -