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Policy discontinuity and duration outcomes

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Author Info

  • Gerard van den Berg

    ()
    (Institute for Fiscal Studies and University of Mannheim)

  • Antoine Bozio

    ()
    (Institute for Fiscal Studies and a report)

  • Monica Costa Dias

    ()
    (Institute for Fiscal Studies and Institute for Fiscal Studies)

Abstract

A comparison of hazard rates of duration outcomes before and after policy changes is hampered by non-identification if there is unobserved heteogeneity in the effects and no model structure is imposed. We develop a discontinuity approach that overcomes this by exploiting variation in the moment at which different cohorts are exposed to the policy change, i.e. by considering spells crossing the policy change. We prove identification of average treatment effect on hazard rates without model structure. We estimate these effects by local linear kernel hazard regression. We use the introduction of the NDYP programme for young unemployed individuals to estimate average programme participation effects on the exit rate to work.

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Bibliographic Info

Paper provided by Institute for Fiscal Studies in its series IFS Working Papers with number W13/27.

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Date of creation: Oct 2013
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Handle: RePEc:ifs:ifsewp:13/27

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  1. John Van Reenen, 2003. "Active Labour Market Policies and the British New Deal for the Young Unemployed in Context," NBER Working Papers 9576, National Bureau of Economic Research, Inc.
  2. Bruno Crépon & Marc Ferracci & Grégory Jolivet & Gerard J. van den Berg, 2009. "Active Labor Market Policy Effects in a Dynamic Setting," Journal of the European Economic Association, MIT Press, vol. 7(2-3), pages 595-605, 04-05.
  3. Richard Blundell & Monica Costa Dias & Costas Meghir & John Van Reenen, 2004. "Evaluating the Employment Impact of a Mandatory Job Search Program," Journal of the European Economic Association, MIT Press, vol. 2(4), pages 569-606, 06.
  4. Fredriksson, Peter & Johansson, Per, 2008. "Dynamic Treatment Assignment," Journal of Business & Economic Statistics, American Statistical Association, vol. 26, pages 435-445.
  5. Dorsett, Richard, 2006. "The new deal for young people: effect on the labour market status of young men," Labour Economics, Elsevier, vol. 13(3), pages 405-422, June.
  6. Brinch, Christian N., 2007. "Nonparametric Identification Of The Mixed Hazards Model With Time-Varying Covariates," Econometric Theory, Cambridge University Press, vol. 23(02), pages 349-354, April.
  7. Jens Perch Nielsen, 2001. "Boundary and Bias Correction in Kernel Hazard Estimation," Scandinavian Journal of Statistics, Danish Society for Theoretical Statistics & Finnish Statistical Society & Norwegian Statistical Association & Swedish Statistical Association, vol. 28(4), pages 675-698.
  8. Meyer, Bruce D, 1996. "What Have We Learned from the Illinois Reemployment Bonus Experiment?," Journal of Labor Economics, University of Chicago Press, vol. 14(1), pages 26-51, January.
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