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Building in an Evaluation Component for Active Labor Market Programs: A Practitioner's Guide

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Author Info

  • Card, David

    ()
    (University of California, Berkeley)

  • Ibarrarán, Pablo

    ()
    (Inter-American Development Bank)

  • Villa, Juan Miguel

    ()
    (University of Manchester)

Abstract

The guide outlines the main evaluation challenges associated with ALMP’s, and shows how to obtain rigorous impact estimates using two leading evaluation approaches. The most credible and straightforward evaluation method is a randomized design, in which a group of potential participants is randomly divided into a treatment and a control group. Random assignment ensures that the two groups would have had similar experiences in the post-program period in the absence of the program intervention. The observed post-program difference therefore yields a reliable estimate of the program impact. The second approach is a difference in differences design that compares the change in outcomes between the participant group and a selected comparison group from before to after the completion of the program. In general the outcomes of the comparison group may differ from the outcomes of the participant group, even in the absence of the program intervention. If the difference observed prior to the program would have persisted in the absence of the program, however, then the change in the outcome gap between the two groups yields a reliable estimate of the program impact. This guideline reviews the various steps in the design and implementation of ALMP’s, and in subsequent analysis of the program data, that will ensure a rigorous and informative impact evaluation using either of these two techniques.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6085.

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Length: 54 pages
Date of creation: Oct 2011
Date of revision:
Handle: RePEc:iza:izadps:dp6085

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Keywords: active labor market programs; policy evaluation; randomized trials; difference in difference; average treatment effect on the treated; development effectiveness;

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References

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  1. DiNardo, John & Lee, David S., 2011. "Program Evaluation and Research Designs," Handbook of Labor Economics, Elsevier.
  2. Charles F. Manski, 1989. "Anatomy of the Selection Problem," Journal of Human Resources, University of Wisconsin Press, vol. 24(3), pages 343-360.
  3. David E. Card & Jochen Kluve & Andrea Weber, 2009. "Active Labor Market Policy Evaluations: A Meta-analysis," NRN working papers 2009-02, The Austrian Center for Labor Economics and the Analysis of the Welfare State, Johannes Kepler University Linz, Austria.
  4. V. Joseph Hotz & Guido W. Imbens & Jacob A. Klerman, 2006. "Evaluating the Differential Effects of Alternative Welfare-to-Work Training Components: A Reanalysis of the California GAIN Program," Journal of Labor Economics, University of Chicago Press, vol. 24(3), pages 521-566, July.
  5. Duflo, Esther & Glennerster, Rachel & Kremer, Michael, 2008. "Using Randomization in Development Economics Research: A Toolkit," Handbook of Development Economics, Elsevier.
  6. David S. Lee & Thomas Lemieux, 2009. "Regression Discontinuity Designs In Economics," Working Papers 1118, Princeton University, Department of Economics, Industrial Relations Section..
  7. Orley Ashenfelter & David Card, 1984. "Using the Longitudinal Structure of Earnings to Estimate the Effect of Training Programs," Working Papers 554, Princeton University, Department of Economics, Industrial Relations Section..
  8. Guido Imbens & Thomas Lemieux, 2007. "Regression Discontinuity Designs: A Guide to Practice," NBER Working Papers 13039, National Bureau of Economic Research, Inc.
  9. Ashenfelter, Orley C, 1978. "Estimating the Effect of Training Programs on Earnings," The Review of Economics and Statistics, MIT Press, vol. 60(1), pages 47-57, February.
  10. John DiNardo & David S. Lee, 2010. "Program Evaluation and Research Designs," Working Papers 1228, Princeton University, Department of Economics, Industrial Relations Section..
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Cited by:
  1. Olsson, Martin, 2013. "Employment Protection and Parental Child Care," Working Paper Series 952, Research Institute of Industrial Economics.
  2. Schneider, Hilmar & Uhlendorff, Arne & Zimmermann, Klaus F., 2011. "Ökonometrie vs. Projektdesign: Lehren aus der Evaluation eines Modellprojekts zur Umsetzung des Workfare-Konzepts," IZA Discussion Papers 5599, Institute for the Study of Labor (IZA).
  3. Loi, Massimo & Rodrigues, Margarida, 2012. "A note on the impact evaluation of public policies: the counterfactual analysis," MPRA Paper 42444, University Library of Munich, Germany.
  4. Olsson, Martin & Tåg, Joacim, 2012. "Private Equity and Employees," Working Paper Series 906, Research Institute of Industrial Economics.
  5. Arni, Patrick, 2012. "Kausale Evaluation von Pilotprojekten: Die Nutzung von Randomisierung in der Praxis," IZA Standpunkte 52, Institute for the Study of Labor (IZA).

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