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Building in an Evaluation Component for Active Labor Market Programs: A Practitioner's Guide

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Author Info

  • David E. Card

    ()

  • Pablo Ibarraran

    ()

  • Juan Miguel Villa

    ()

Abstract

The guide outlines the main evaluation challenges associated with ALMP’s, and shows how to obtain rigorous impact estimates using two leading evaluation approaches. The most credible and straightforward evaluation method is a randomized design, in which a group of potential participants is randomly divided into a treatment and a control group. Random assignment ensures that the two groups would have had similar experiences in the post-program period in the absence of the program intervention. The observed post-program difference therefore yields a reliable estimate of the program impact. The second approach is a difference in differences design that compares the change in outcomes between the participant group and a selected comparison group from before to after the completion of the program. In general the outcomes of the comparison group may differ from the outcomes of the participant group, even in the absence of the program intervention. If the difference observed prior to the program would have persisted in the absence of the program, however, then the change in the outcome gap between the two groups yields a reliable estimate of the program impact. This guideline reviews the various steps in the design and implementation of ALMP’s, and in subsequent analysis of the program data, that will ensure a rigorous and informative impact evaluation using either of these two techniques.

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Bibliographic Info

Paper provided by Inter-American Development Bank, Office of Strategic Planning and Development Effectiveness (SPD) in its series SPD Working Papers with number 1101.

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Date of creation: Oct 2011
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Handle: RePEc:idb:spdwps:1101

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Related research

Keywords: Active Labor Market Programs; Policy Evaluation; Randomized Trials; Difference in Difference; Average Treatment Effect on the Treated; Development Effectiveness;

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References

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  1. V. Joseph Hotz & Guido W. Imbens & Jacob A. Klerman, 2006. "Evaluating the Differential Effects of Alternative Welfare-to-Work Training Components: A Re-Analysis of the California GAIN Program," NBER Working Papers 11939, National Bureau of Economic Research, Inc.
  2. David Card & Jochen Kluve & Andrea Weber, 2010. "Active Labor Market Policy Evaluations: A Meta-Analysis," NBER Working Papers 16173, National Bureau of Economic Research, Inc.
  3. Esther Duflo & Rachel Glennerster & Michael Kremer, 2006. "Using Randomization in Development Economics Research: A Toolkit," NBER Technical Working Papers 0333, National Bureau of Economic Research, Inc.
  4. David S. Lee & Thomas Lemieux, 2009. "Regression Discontinuity Designs In Economics," Working Papers 1118, Princeton University, Department of Economics, Industrial Relations Section..
  5. DiNardo, John & Lee, David S., 2011. "Program Evaluation and Research Designs," Handbook of Labor Economics, Elsevier.
  6. Ashenfelter, Orley & Card, David, 1985. "Using the Longitudinal Structure of Earnings to Estimate the Effect of Training Programs," The Review of Economics and Statistics, MIT Press, vol. 67(4), pages 648-60, November.
  7. Imbens, Guido W. & Lemieux, Thomas, 2008. "Regression discontinuity designs: A guide to practice," Journal of Econometrics, Elsevier, vol. 142(2), pages 615-635, February.
  8. Charles F. Manski, 1989. "Anatomy of the Selection Problem," Journal of Human Resources, University of Wisconsin Press, vol. 24(3), pages 343-360.
  9. John DiNardo & David S. Lee, 2010. "Program Evaluation and Research Designs," Working Papers 1228, Princeton University, Department of Economics, Industrial Relations Section..
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Citations

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Cited by:
  1. Hilmar Schneider & Arne Uhlendorff & Klaus F. Zimmermann, 2013. "Oekonometrie vs. Projektdesign: Lehren aus der Evaluation eines Modellprojekts zur Umsetzung des Workfare-Konzepts," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 233(1), pages 65-85, January.
  2. Olsson, Martin & Tåg, Joacim, 2012. "Private Equity and Employees," Working Paper Series 906, Research Institute of Industrial Economics.
  3. Loi, Massimo & Rodrigues, Margarida, 2012. "A note on the impact evaluation of public policies: the counterfactual analysis," MPRA Paper 42444, University Library of Munich, Germany.
  4. Olsson, Martin, 2013. "Employment Protection and Parental Child Care," Working Paper Series 952, Research Institute of Industrial Economics.
  5. Arni, Patrick, 2012. "Kausale Evaluation von Pilotprojekten: Die Nutzung von Randomisierung in der Praxis," IZA Standpunkte 52, Institute for the Study of Labor (IZA).

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