Research Department Working Paper n°10

Do public employment services improve employment outcomes? Evidence from Colombia

The paper assesses the effects of participation in the Public Employment Service (PES) in Colombia by means of propensity score matching.

Results show that participating in the PES increases the probability of having a formal (rather than informal) job.

Around two thirds of this effect is related to the fact that PES participants are generally placed in larger companies. By contrast, participation in the PES has a negative effect on hourly wages. This derives from a positive effect on the wages of the low-skilled and a negative effect on the wages of the high-skilled.

For both formal employment and wages, the PES has a more positive effect when the services are provided face-to-face rather than online. The results are robust to (i) changes in the matching algorithm; (ii) modifications in the area of common support; and (iii) possible presence of unobserved heterogeneity.