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Sensitivity of Matching-Based Program Evaluations to the Availability of Control Variables

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  • Michael Lechner
  • Conny Wunsch

Abstract

Based on new, exceptionally informative and large German linked employer-employee administrative data, we investigate the question whether the omission of important control variables in matching estimation leads to biased impact estimates of typical active labour market programs for the unemployed. Such biases would lead to false policy conclusions about the cost-effectiveness of these expensive policies. Using newly developed Empirical Monte Carlo Study methods, we find that besides standard personal characteristics, information on individual health and firm characteristics of the last employer are particularly important for selection correction. Moreover, it is important to account for past performance on the labour market in a very detailed and flexible way. Information on job search behaviour, timing of unemployment and program start, as well as detailed regional characteristics are also relevant.

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Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 3381.

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Date of creation: 2011
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Handle: RePEc:ces:ceswps:_3381

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Keywords: training; job search assistance; matching estimation; active labour market policies;

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References

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Citations

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Cited by:
  1. Marco Caliendo & Steffen Künn, 2012. "Getting back into the Labor Market: The Effects of Start-up Subsidies for Unemployed Females," Discussion Papers of DIW Berlin 1260, DIW Berlin, German Institute for Economic Research.
  2. Petri, Böckerman & Mika, Maliranta, 2012. "Outsourcing, occupational restructuring, and employee well-being: Is there a silver lining?," MPRA Paper 38230, University Library of Munich, Germany.
  3. Huber, Martin & Lechner, Michael & Wunsch, Conny, 2013. "The effect of firms' partial retirement policies on the labour market outcomes of their employees," CEPR Discussion Papers 9574, C.E.P.R. Discussion Papers.
  4. Choe, Chung & Flores-Lagunes, Alfonso & Lee, Sang-Jun, 2011. "Do Dropouts Benefit from Training Programs? Korean Evidence Employing Methods for Continuous Treatments," IZA Discussion Papers 6064, Institute for the Study of Labor (IZA).
  5. Boockmann, Bernhard & Osiander, Christopher & Stops, Michael & Verbeek, Hans, 2013. "Effekte von Vermittlerhandeln und Vermittlerstrategien im SGB II und SGB III (Pilotstudie) : Abschlussbericht an das IAB durch das Institut für Angewandte Wirtschaftsforschung e. V. (IAW), Tübingen," IAB-Forschungsbericht 201307, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  6. Horst Raff & Natalia Trofimenko, 2013. "World Market Access of Emerging-Market Firms: The Role of Foreign Ownership and Access to External Finance," CESifo Working Paper Series 4346, CESifo Group Munich.
  7. Advani, Arun & Sloczynski, Tymon, 2013. "Mostly Harmless Simulations? On the Internal Validity of Empirical Monte Carlo Studies," IZA Discussion Papers 7874, Institute for the Study of Labor (IZA).
  8. Lechner, Michael, 2013. "Treatment effects and panel data," Economics Working Paper Series 1314, University of St. Gallen, School of Economics and Political Science.
  9. Joseph, Olivier & Pailhé, Ariane & Recotillet, Isabelle & Solaz, Anne, 2013. "The economic impact of taking short parental leave: Evaluation of a French reform," Labour Economics, Elsevier, vol. 25(C), pages 63-75.
  10. Barbara Sianesi, 2013. "Dealing with randomisation bias in a social experiment exploiting the randomisation itself: the case of ERA," IFS Working Papers W13/15, Institute for Fiscal Studies.
  11. Caliendo, Marco & Künn, Steffen & Schmidl, Ricarda, 2011. "Fighting Youth Unemployment: The Effects of Active Labor Market Policies," IZA Discussion Papers 6222, Institute for the Study of Labor (IZA).

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