Devolving public employment services: Preliminary assessment of the Australian experiment

The trend in OECD countries has been to devolve the delivery of active assistance programmes for the unemployed and make employment services markets more competitive. In order to contribute to the evidence on the effectiveness of different models, the authors assess the initial experience of Australia's radical experiment of contracting out, under the Job Network, almost all the services previously provided by the public employment service. They consider job-matching activities, job-search training, and intensive assistance for disadvantaged jobseekers, and conclude that, unless contracts are well specified and payments well structured, negative incentive effects will detract from social outcomes.