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

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  • Bloemen, Hans

    ()
    (VU University Amsterdam)

  • Stancanelli, Elena G. F.

    ()
    (CNRS, Sorbonne Economics Research Center (CES))

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 Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2607.

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Length: 38 pages
Date of creation: Feb 2007
Date of revision:
Handle: RePEc:iza:izadps:dp2607

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

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  1. Richard Blundell & Hilary W. Hoynes, 2004. "Has 'In-Work' Benefit Reform Helped the Labor Market?," NBER Chapters, National Bureau of Economic Research, Inc, in: Seeking a Premier Economy: The Economic Effects of British Economic Reforms, 1980-2000, pages 411-460 National Bureau of Economic Research, Inc.
  2. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-in-Differences Estimates?," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 119(1), pages 249-275, February.
  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, Department of Economics, Institute for Business and Economic Research, UC Berkeley qt1024b9z8, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
  4. Richard Blundell & Thomas MaCurdy, 1998. "Labour supply: a review of alternative approaches," IFS Working Papers, Institute for Fiscal Studies W98/18, Institute for Fiscal Studies.
  5. Heckman, James J & Ichimura, Hidehiko & Todd, Petra, 1998. "Matching as an Econometric Evaluation Estimator," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 65(2), pages 261-94, April.
  6. Elena Stancanelli, 2004. "Evaluating the impact of the French tax credit programme: a difference in difference model," Documents de Travail de l'OFCE, Observatoire Francais des Conjonctures Economiques (OFCE) 2004-07, Observatoire Francais des Conjonctures Economiques (OFCE).
  7. Gabor Kezdi, 2005. "Robus Standard Error Estimation in Fixed-Effects Panel Models," Econometrics, EconWPA 0508018, EconWPA.
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