An evaluation of the management of the Finnish employment service

This paper analyses the efficiency of the Finnish Employment Service's mana gement in selecting unemployed individuals who are offered a job. The datab ase used considers short-term unemployed individuals who face the same labo ur market conditions in 1996. Duration analysis with a Weibull model has be en performed in order to study the determinants of the transition probabili ty from unemployment into employment and the impact of receiving job offers through the Employment Service (ES). In order to carry this out, it has be en taken into account that the reception of such job offers may be endogeno us because the ES selects the individuals who will receive the offers. The empirical results suggest that the decisions made by the ES are adequate in the sense that they increase the benefit of society, compared with a rando m assignment of the vacancies offered through the ES. Moreover, the effects of the other determinants depend on whether the individual receives offers . The results also point out that individuals who receive no offers through the ES are more likely, as time passes by, to be discouraged in searching for a job than those who do.