@TechReport{iza:izadps:dp5170, author={Addison, John T. and Altemeyer-Bartscher, Martin and Kuhn, Thomas}, title={The Dilemma of Delegating Search: Budgeting in Public Employment Services}, year={2010}, month={Sep}, institution={Institute of Labor Economics (IZA)}, address={Bonn}, type={IZA Discussion Paper}, number={5170}, url={https://www.iza.org/publications/dp5170}, abstract={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.}, keywords={matching unemployment;public employment service;delegation problem;moral hazard;search theory}, }