Public employment agencies and unemployment spells: Reconciling the experimental and nonexperimental evidence

Econometric evidence strongly suggests that unemployed job-seekers who use the services of a Public Employment Agency (PEA) have longer unemployment spells than those choosing alternative search methods. Yet, in some well-designed U.S. experiments, increased use of PEA services has been associated with faster transitions into jobs. The author argues that the nonexperimental studies may be. biased toward finding a positive relationship between unemployment spell duration and PEA use because they ignore the possibility that PEAs are chosen by many jobseekers only after other search methods have been tried unsuccessfully and a period of unemployment has elapsed. An analysis of U.K. survey data with information on the timing of PEA use in 1987-88 supports that hypothesis.