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Treatment Evaluation in the Case of Interactions within Markets

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Author Info

  • 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. Pascal Michaillat & Emmanuel Saez & Camille Landais, 2011. "Optimal Unemployment Insurance over the Business Cycle," 2011 Meeting Papers, Society for Economic Dynamics 124, Society for Economic Dynamics.
  2. Ronald Wolthoff, 2013. "It's About Time: Implications of the Period Length in an Equilibrium Search Model," Working Papers, University of Toronto, Department of Economics tecipa-476, University of Toronto, Department of Economics.
  3. Rafael Lalive & Camille Landais & Josef Zweimüller, 2013. "Market Externalities of Large Unemployment Insurance Extension Programs," NRN working papers, The Austrian Center for Labor Economics and the Analysis of the Welfare State, Johannes Kepler University Linz, Austria 2013-12, The Austrian Center for Labor Economics and the Analysis of the Welfare State, Johannes Kepler University Linz, Austria.
  4. Bruno Crépon & Esther Duflo & Marc Gurgand & Roland Rathelot & Philippe Zamora, 2013. "Do Labor Market Policies have Displacement Effects? Evidence from a Clustered Randomized Experiment," The Quarterly Journal of Economics, Oxford University Press, Oxford University Press, vol. 128(2), pages 531-580.
  5. Sylvie Blasco & Barbara Pertold-Gebicka, 2012. "Employment Policies, Hiring Practices and Firm Performance," Working Papers, Centre de Recherche en Economie et Statistique 2012-27, Centre de Recherche en Economie et Statistique.
  6. repec:dgr:uvatin:2012071 is not listed on IDEAS
  7. Pieter Gautier & Paul Muller & Bas van der Klaauw, & Michael Rosholm & Michael Svarer, 2012. "Estimating Equilibrium Effects of Job Search Assistance," Economics Working Papers, School of Economics and Management, University of Aarhus 2012-27, School of Economics and Management, University of Aarhus.

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