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Estimating Equilibrium Effects of Job Search Assistance

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Author Info

  • Gautier, Pieter

    ()
    (VU University Amsterdam)

  • Muller, Paul

    ()
    (VU University Amsterdam)

  • van der Klaauw, Bas

    ()
    (VU University Amsterdam)

  • Rosholm, Michael

    ()
    (Aarhus University)

  • Svarer, Michael

    ()
    (Aarhus University)

Abstract

Randomized experiments provide policy relevant treatment effects if there are no spillovers between participants and nonparticipants. We show that this assumption is violated for a Danish activation program for unemployed workers. Using a difference-in-difference model we show that the nonparticipants in the experiment regions find jobs slower after the introduction of the activation program (relative to workers in other regions). We then estimate an equilibrium search model. This model shows that a large scale role out of the activation program decreases welfare, while a standard partial microeconometric cost-benefit analysis would conclude the opposite.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6748.

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Length: 47 pages
Date of creation: Jul 2012
Date of revision:
Handle: RePEc:iza:izadps:dp6748

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Keywords: randomized experiment; policy-relevant treatment effects; job search; externalities; indirect inference;

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References

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  1. Brian Krogh Graversen & Jan C. van Ours, 2011. "An Activation Program as a Stick to Job Finding," LABOUR, CEIS, vol. 25(2), pages 167-181, 06.
  2. Blundell, Richard William & Costa Dias, Monica & Meghir, Costas & Van Reenen, John, 2003. "Evaluating the Employment Impact of a Mandatory Job Search Programme," CEPR Discussion Papers 3786, C.E.P.R. Discussion Papers.
  3. Moretti, Enrico, 2004. "Estimating the social return to higher education: evidence from longitudinal and repeated cross-sectional data," Journal of Econometrics, Elsevier, vol. 121(1-2), pages 175-212.
  4. Jeremy Lise & Shannon Seitz & Jeffrey Smith, 2003. "Equilibrium Policy Experiments and the Evaluation of Social Programs," University of Western Ontario, CIBC Centre for Human Capital and Productivity Working Papers 20032, University of Western Ontario, CIBC Centre for Human Capital and Productivity.
  5. Ridder, Geert & Tunali, Insan, 1999. "Stratified partial likelihood estimation," Journal of Econometrics, Elsevier, vol. 92(2), pages 193-232, October.
  6. Rosholm, Michael, 2008. "Experimental Evidence on the Nature of the Danish Employment Miracle," IZA Discussion Papers 3620, Institute for the Study of Labor (IZA).
  7. Edward Miguel & Michael Kremer, 2004. "Worms: Identifying Impacts on Education and Health in the Presence of Treatment Externalities," Econometrica, Econometric Society, vol. 72(1), pages 159-217, 01.
  8. James Albrecht, Pieter Gautier, & Susan Vroman, 2003. "Equilibrium Directed Search with Multiple Application," Working Papers gueconwpa~03-03-02, Georgetown University, Department of Economics.
  9. Vikström, Johan & Rosholm, Michael & Svarer, Michael, 2011. "The relative efficiency of active labour market policy: evidence from a social experiment and non-parametric methods," Working Paper Series 2011:7, IFAU - Institute for Evaluation of Labour Market and Education Policy.
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  22. Ashenfelter, Orley & Ashmore, David & Deschenes, Olivier, 2000. "Do Unemployment Insurance Recipients Actively Seek Work? Evidence From Randomized Trials in Four U.S. States," IZA Discussion Papers 128, Institute for the Study of Labor (IZA).
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Citations

Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. How randomized experiments can go very wrong
    by Economic Logician in Economic Logic on 2012-12-19 15:05:00
  2. [??]??????????????????
    by himaginary in himaginaryの日記 on 2013-01-11 08:00:00
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
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Cited by:
  1. Blasco, Sylvie & Pertold-Gebicka, Barbara, 2012. "Employment Policies, Hiring Practices and Firm Performance," IZA Discussion Papers 7013, Institute for the Study of Labor (IZA).
  2. Fuhito Kojima & Parag A. Pathak & Alvin E. Roth, 2010. "Matching with Couples: Stability and Incentives in Large Markets," NBER Working Papers 16028, National Bureau of Economic Research, Inc.
  3. van der Klaauw, Bas, 2014. "From Micro Data to Causality: Forty Years of Empirical Labor Economics," IZA Discussion Papers 8047, Institute for the Study of Labor (IZA).
  4. 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].
  5. Vikström, Johan & Rosholm, Michael & Svarer, Michael, 2013. "The effectiveness of active labor market policies: Evidence from a social experiment using non-parametric bounds," Labour Economics, Elsevier, vol. 24(C), pages 58-67.

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