Assessing the External Validity of an Experimental Wage Subsidy
AbstractIn Canada, a policy aiming at helping single parents on social assistance become self-reliant was implemented on an experimental basis. The Self-Sufficiency Entry Effects Demonstration randomly selected a sample of 4,134 single parents who had applied for welfare between January 1994 and March 1995. It turned out only 3,315 took part in the experiment despite a 50% chance of receiving a generous, time-limited, earnings supplement conditional on finding a full-time job and leaving income assistance within a year. The purpose of this paper is to determine whether a non-response rate of 20% is likely to harm the external validity of the experiment. We compare the estimated impact of the program using experimental data only to that obtained using additional data on individuals not taking part in the experiment. We find strong evidence of non-response bias in the data. When we correct for the bias, we find that estimates that rely on experimental data only significantly underestimate the true impact of the program.
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Bibliographic InfoArticle provided by ENSAE in its journal Annals of Economics and Statistics.
Volume (Year): (2008)
Issue (Month): 91-92 ()
Other versions of this item:
- Kamionka, Thierry & Lacroix, Guy, 2005. "Assessing the External Validity of an Experimental Wage Subsidy," IZA Discussion Papers 1508, Institute for the Study of Labor (IZA).
- I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
- C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
- C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
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- Hilary W. Hoynes & Marianne P Bitler & Jonah B. Gelbach, 2005.
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- Bitler, Marianne P. & Gelbach, Jonah B. & Hoynes, Hilary W., 2008. "Distributional impacts of the Self-Sufficiency Project," Journal of Public Economics, Elsevier, vol. 92(3-4), pages 748-765, April.
- Marianne P. Bitler & Jonah B. Gelbach & Hilary W. Hoynes, 2005. "Distributional Impacts of the Self-Sufficiency Project," NBER Working Papers 11626, National Bureau of Economic Research, Inc.
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