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Sensitivity of Matching-Based Program Evaluations to the Availability of Control Variables

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  • Lechner, Michael

    ()
    (University of St. Gallen)

  • Wunsch, Conny

    ()
    (University of Basel)

Abstract

Based on new, exceptionally informative and large German linked employer-employee administrative data, we investigate the question whether the omission of important control variables in matching estimation leads to biased impact estimates of typical active labour market programs for the unemployed. Such biases would lead to false policy conclusions about the cost-effectiveness of these expensive policies. Using newly developed Empirical Monte Carlo Study methods, we find that besides standard personal characteristics, information on individual health and firm characteristics of the last employer are particularly important for selection correction. Moreover, it is important to account for past performance on the labour market in a very detailed and flexible way. Information on job search behaviour, timing of unemployment and program start, as well as detailed regional characteristics are also relevant.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 5553.

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Length: 75 pages
Date of creation: Mar 2011
Date of revision:
Publication status: published in: Labour Economics, 2013, 21, 111-121
Handle: RePEc:iza:izadps:dp5553

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Keywords: matching estimation; job search assistance; active labour market policies; training;

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References

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Cited by:
  1. Boockmann, Bernhard & Osiander, Christopher & Stops, Michael & Verbeek, Hans, 2013. "Effekte von Vermittlerhandeln und Vermittlerstrategien im SGB II und SGB III (Pilotstudie) : Abschlussbericht an das IAB durch das Institut für Angewandte Wirtschaftsforschung e. V. (IAW), Tübingen," IAB-Forschungsbericht 201307, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  2. Huber, Martin & Lechner, Michael & Wunsch, Conny, 2013. "The effect of firms' partial retirement policies on the labour market outcomes of their employees," CEPR Discussion Papers 9574, C.E.P.R. Discussion Papers.
  3. Lechner, Michael, 2013. "Treatment effects and panel data," Economics Working Paper Series 1314, University of St. Gallen, School of Economics and Political Science.
  4. Böckerman, Petri & Maliranta, Mika, 2012. "Outsourcing, occupational restructuring, and employee well-being: Is there a silver lining?," Discussion Papers 1271, The Research Institute of the Finnish Economy.
  5. FLORES-LAGUNES Alfonso & CHOE Chung & LEE Sang-Jun, 2011. "Do Dropouts Benefit from Training Programs? Korean Evidence Employing Methods for Continuous Treatments," CEPS/INSTEAD Working Paper Series 2011-34, CEPS/INSTEAD.
  6. Caliendo, Marco & Künn, Steffen, 2012. "Getting Back into the Labor Market: The Effects of Start-Up Subsidies for Unemployed Females," IZA Discussion Papers 6830, Institute for the Study of Labor (IZA).
  7. Horst Raff & Natalia Trofimenko, 2013. "World Market Access of Emerging-Market Firms: the Role of Foreign Ownership and Access to External Finance," Kiel Working Papers 1848, Kiel Institute for the World Economy.
  8. Barbara Sianesi, 2013. "Dealing with randomisation bias in a social experiment exploiting the randomisation itself: the case of ERA," IFS Working Papers W13/15, Institute for Fiscal Studies.
  9. Arun Advani & Tymon Sloczynski, 2013. "Mostly harmless simulations? On the internal validity of empirical Monte Carlo studies," CeMMAP working papers CWP64/13, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
  10. Joseph, Olivier & Pailhé, Ariane & Recotillet, Isabelle & Solaz, Anne, 2013. "The economic impact of taking short parental leave: Evaluation of a French reform," Labour Economics, Elsevier, vol. 25(C), pages 63-75.
  11. Caliendo, Marco & Künn, Steffen & Schmidl, Ricarda, 2011. "Fighting Youth Unemployment: The Effects of Active Labor Market Policies," IZA Discussion Papers 6222, Institute for the Study of Labor (IZA).

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