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Young in-Old out: a new evaluation based on Generalized Propensity Score

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  • Michela Bia
  • Roberto Leombruni
  • Pierre-Jean Messe

Abstract

This paper aims at evaluating the effect of the amount of older workers exits (aged 50 or more) on the entries of youngsters at a local labour market level, during years 1985 - 2002. If we can observe some effect of the exits on the entries, it will shed light on the substitution between older workers and youngsters. Moreover, since in our model the causal agent cannot be specified a – priori, we don’t know what causes what. Hence, we are actually looking for a correlation between these two quantities. Systematic differences in background characteristics, between local markets with different levels of the older workers exits, can bias the effect estimation on the entries of youngsters. In order to adjust for this, we apply propensity score methods as extended and generalized in a setting with a continuous treatment by Hirano and Imbens (2004). Our results show a positive and significant correlation between exits of older workers and entries of youngsters.

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Bibliographic Info

Paper provided by LABORatorio R. Revelli, Centre for Employment Studies in its series LABORatorio R. Revelli Working Papers Series with number 93.

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Date of creation: 2009
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Handle: RePEc:cca:wplabo:93

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Keywords: Synthetic firms; Evaluation; Non-experimental methods; Continuous treatment; Matching; Generalized propensity score; Dose-response function.;

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  3. Keisuke Hirano & Guido W. Imbens & Geert Ridder, 2003. "Efficient Estimation of Average Treatment Effects Using the Estimated Propensity Score," Econometrica, Econometric Society, Econometric Society, vol. 71(4), pages 1161-1189, 07.
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  11. Michela Bia & Alessandra Mattei, 2008. "A Stata package for the estimation of the dose–response function through adjustment for the generalized propensity score," Stata Journal, StataCorp LP, StataCorp LP, vol. 8(3), pages 354-373, September.
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  19. DiPrete, Thomas A. & Gangl, Markus, 2004. "Assessing bias in the estimation of causal effects: Rosenbaum bounds on matching estimators and instrumental variables estimation with imperfect instruments," Discussion Papers, Research Unit: Labor Market Policy and Employment SP I 2004-101, Social Science Research Center Berlin (WZB).
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