Finding jobs for long-term unemployed job seekers is a key challenge. We study how Hestia, a private job search assistance organization, compares to the public employment service in Geneva. In a randomized field experiment, we follow unemployment benefit recipients two years prior to five years after assignment to treatment and find that Hestia’s clients enter jobs earlier, especially during the first six months after the start of the experiment. Yet, the initial employment gain dissipates completely, and
becomes even negative and significant two years after assignment. Hestia’s clients leave jobs quickly immediately after starting a job, and right after the start of the second year. They also earn less on the job than the control group. All of this suggests that Hestia places job seekers faster but into worse jobs. Despite this, we find that the most pessimistic cost-benefit analysis comes out marginally in Hestia’s favor. |
