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A Model with Endogenous Programme Participation: Evaluating the Tax Credit in France

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  • Hans G. Bloemen

    ()
    (Vrije Universiteit Amsterdam)

  • Elena Stancanelli

    ()
    (CNRS, GREDEG, Nice, and OFCE, Sciences-Po, Paris)

Abstract

This paper provides new estimates of the impact of the French tax credit on the employment outcomes of women. We model simultaneously the employment probability and the determinants of programme eligibility. We improve on earlier studies in this field that, using a single evaluation equation framework, predicted ex-ante programme eligibility. Within this framework, we also allow for hours responses. The data for the analysis are drawn from the French labour force surveys of years 1999 to 2002. We find no significant impact of the tax credit on either employment or hours of French women.

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Bibliographic Info

Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 07-016/3.

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Date of creation: 01 Feb 2007
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Handle: RePEc:dgr:uvatin:20070016

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Web page: http://www.tinbergen.nl

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Keywords: policy evaluation; difference-in-difference estimator; labour supply;

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  1. Gabor Kezdi, 2005. "Robus Standard Error Estimation in Fixed-Effects Panel Models," Econometrics 0508018, EconWPA.
  2. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2002. "How Much Should We Trust Differences-in-Differences Estimates?," NBER Working Papers 8841, National Bureau of Economic Research, Inc.
  3. Eissa, Nada & Hoynes, Hilary Williamson, 1999. "The Earned Income Tax Credit and the Labor Supply of Married Couples," Department of Economics, Working Paper Series qt1024b9z8, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
  4. Hilary Hoynes & Richard Blundell, 2001. "Has "In-Work" Benefit Reform Helped the Labour Market?," NBER Working Papers 8546, National Bureau of Economic Research, Inc.
  5. Elena Stancanelli, 2004. "Evaluating the impact of the French tax credit programme: a difference in difference model," Documents de Travail de l'OFCE 2004-07, Observatoire Francais des Conjonctures Economiques (OFCE).
  6. Blundell, Richard & Macurdy, Thomas, 1999. "Labor supply: A review of alternative approaches," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 27, pages 1559-1695 Elsevier.
  7. Heckman, James J & Ichimura, Hidehiko & Todd, Petra, 1998. "Matching as an Econometric Evaluation Estimator," Review of Economic Studies, Wiley Blackwell, vol. 65(2), pages 261-94, April.
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