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Treatment Evaluation in the Case of Interactions within Markets

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  • Ferracci, Marc

    ()
    (CREST-INSEE)

  • Jolivet, Grégory

    ()
    (University of Bristol)

  • van den Berg, Gerard J.

    ()
    (University of Mannheim)

Abstract

We extend the standard evaluation framework to allow for interactions between individuals within segmented markets. An individual's outcome depends not only on the assigned treatment status but also on (features of) the distribution of the assigned treatments in his market. To evaluate how the distribution of treatments within a market causally affects the average effect within the market, averaged over the full population, we develop an identification and estimation method in two steps. The first one focuses on the distribution of the treatment within markets and between individuals and the second step addresses the distribution of the treatment between markets. We apply our method to data on training programs for unemployed workers in France. We use a rich administrative register of unemployment and training spells as well as the information on local labor demand that is used by unemployment agencies to allocate training programs. The results show that the average treatment effect on the employment rate causally decreases with respect to the proportion treated in the market. Our analysis accounts for unobserved heterogeneity between markets (using the longitudinal dimension of the data) and, in a robustness check, between individuals.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4700.

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Length: 42 pages
Date of creation: Jan 2010
Date of revision:
Handle: RePEc:iza:izadps:dp4700

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Keywords: treatment evaluation; equilibrium effects; matching estimators;

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Cited by:
  1. Lalive, Rafael & Landais, Camille & Zweimüller, Josef, 2013. "Market Externalities of Large Unemployment Insurance Extension Programs," IZA Discussion Papers 7650, Institute for the Study of Labor (IZA).
  2. Camille Landais & Pascal Michaillat & Emmanuel Saez, 2013. "Optimal Unemployment Insurance over the Business Cycle," Discussion Papers 1303, Centre for Macroeconomics (CFM).
  3. Blasco, Sylvie & Pertold-Gebicka, Barbara, 2013. "Employment policies, hiring practices and firm performance," Labour Economics, Elsevier, vol. 25(C), pages 12-24.
  4. Gautier, Pieter A & Muller, Paul & Rosholm, Michael & Svarer, Michael & van der Klaauw, Bas, 2012. "Estimating equilibrium effects of job search assistance," CEPR Discussion Papers 9066, C.E.P.R. Discussion Papers.
  5. Bruno Crépon & Esther Duflo & Marc Gurgand & Roland Rathelot & Philippe Zamora, 2012. "Do Labor Market Policies have Displacement Effects? Evidence from a Clustered Randomized Experiment," Working Papers 2012-28, Centre de Recherche en Economie et Statistique.
  6. Ronald Wolthoff, 2013. "It's About Time: Implications of the Period Length in an Equilibrium Search Model," Working Papers tecipa-476, University of Toronto, Department of Economics.
  7. repec:dgr:uvatin:2012071 is not listed on IDEAS

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