Reciprocity and the relationship between the unemployed and the case worker

This project aims to analyze the rol that reciprocity plays for the relation between the unemployed and the caseworker. Reciprocity can be defined as the degree to which an economic agent is willing to incur costs in order to reward other agents' positive behavior or to punish agents' negative behavior (Falk an Fischblacher, 2006). taking into account reciprocal motives is important for predicting and understanding the response to policies, in particular in labor markets where contracts cannot fully specify all important aspects of a relation between to parties (Fehr and Gächter, 2006).

Our study contributes to the literature on behavioral economics and labor economics in several ways. First, we apply the concept of reciprocity to unemployed individuals rather than to employed individuals. Accordingly, we analyze how labor markets prospects depend on individual social preferences. Second, the interaction between the caseworker and the unemployed has almost remained a black box. In our project we will provide some insights into this relationship. In particular, we show how labor-related effort of unemployed with different degree of reciprocity varies by incentives provided by the caseworkers.One feature of our setting is that we use subjective and objective measures of the caseworker's incentives drawn from admlinistrative records, allowing us to draw conclusions on the importance of the caseworker's effort spent on the interaction with the unemployed.