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A note on the impact evaluation of public policies: the counterfactual analysis

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  • Loi, Massimo
  • Rodrigues, Margarida

Abstract

This report describes concisely, and in an intuitive way, the policy evaluation framework and the different counterfactual analysis evaluation strategies: propensity score matching, regression discontinuity design, differences-in-differences and instrumental variables. For each method we present the main assumptions it relies on and the data requirements. These methodologies apply to any type of policy and, in general, to any type of intervention. A selection of papers applying this approach in the context of labour market interventions is also included.

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File URL: http://mpra.ub.uni-muenchen.de/42444/
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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 42444.

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Date of creation: 2012
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Handle: RePEc:pra:mprapa:42444

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Keywords: counterfactual analysis; propensity score matching; regression discontinuity; difference in difference; instrumental variables;

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References

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  1. Caliendo, Marco & Kopeinig, Sabine, 2005. "Some Practical Guidance for the Implementation of Propensity Score Matching," IZA Discussion Papers 1588, Institute for the Study of Labor (IZA).
  2. Lechner, Michael, 1999. "Earnings and Employment Effects of Continuous Off-the-Job Training in East Germany after Unification," Journal of Business & Economic Statistics, American Statistical Association, American Statistical Association, vol. 17(1), pages 74-90, January.
  3. Crépon, Bruno & Duflo, Esther & Gurgand, Marc & Rathelot, Roland & Zamora, Philippe, 2012. "Do Labor Market Policies Have Displacement Effects? Evidence from a Clustered Randomized Experiment," CEPR Discussion Papers, C.E.P.R. Discussion Papers 9251, C.E.P.R. Discussion Papers.
  4. Peter Z. Schochet & John Burghardt & Sheena McConnell, 2008. "Does Job Corps Work? Impact Findings from the National Job Corps Study," American Economic Review, American Economic Association, American Economic Association, vol. 98(5), pages 1864-86, December.
  5. Joshua D. Angrist & Guido W. Imbens, 1995. "Identification and Estimation of Local Average Treatment Effects," NBER Technical Working Papers, National Bureau of Economic Research, Inc 0118, National Bureau of Economic Research, Inc.
  6. A. Smith, Jeffrey & E. Todd, Petra, 2005. "Does matching overcome LaLonde's critique of nonexperimental estimators?," Journal of Econometrics, Elsevier, Elsevier, vol. 125(1-2), pages 305-353.
  7. Blundell, Richard & Costa Dias, Monica, 2008. "Alternative Approaches to Evaluation in Empirical Microeconomics," IZA Discussion Papers 3800, Institute for the Study of Labor (IZA).
  8. Guido W. Imbens, 2004. "Nonparametric Estimation of Average Treatment Effects Under Exogeneity: A Review," The Review of Economics and Statistics, MIT Press, vol. 86(1), pages 4-29, February.
  9. Barbara Sianesi, 2004. "An Evaluation of the Swedish System of Active Labor Market Programs in the 1990s," The Review of Economics and Statistics, MIT Press, vol. 86(1), pages 133-155, February.
  10. Alberto Abadie & Joshua Angrist & Guido Imbens, 2002. "Instrumental Variables Estimates of the Effect of Subsidized Training on the Quantiles of Trainee Earnings," Econometrica, Econometric Society, Econometric Society, vol. 70(1), pages 91-117, January.
  11. Brian Bell & Richard Blundell & John Van Reenen, 1999. "Getting the unemployed back to work: the role of targeted wage subsidies," IFS Working Papers, Institute for Fiscal Studies W99/12, Institute for Fiscal Studies.
  12. Heckman, James J & Ichimura, Hidehiko & Todd, Petra E, 1997. "Matching as an Econometric Evaluation Estimator: Evidence from Evaluating a Job Training Programme," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 64(4), pages 605-54, October.
  13. Battistin, Erich & Rettore, Enrico, 2008. "Ineligibles and eligible non-participants as a double comparison group in regression-discontinuity designs," Journal of Econometrics, Elsevier, Elsevier, vol. 142(2), pages 715-730, February.
  14. Shahidur R. Khandker & Gayatri B. Koolwal & Hussain A. Samad, 2010. "Handbook on Impact Evaluation : Quantitative Methods and Practices," World Bank Publications, The World Bank, number 2693, August.
  15. Card, David & Ibarrarán, Pablo & Villa, Juan Miguel, 2011. "Building in an Evaluation Component for Active Labor Market Programs: A Practitioner's Guide," IZA Discussion Papers 6085, Institute for the Study of Labor (IZA).
  16. Hujer, Reinhard & Caliendo, Marco, 2000. "Evaluation of Active Labour Market Policy: Methodological Concepts and Empirical Estimates," IZA Discussion Papers 236, Institute for the Study of Labor (IZA).
  17. Caliendo, Marco & Hujer, Reinhard & Thomsen, Stephan L., 2005. "The Employment Effects of Job Creation Schemes in Germany: A Microeconometric Evaluation," IZA Discussion Papers 1512, Institute for the Study of Labor (IZA).
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