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Statistical Treatment Choice: An Application to Active Labour Market Programmes

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  • Markus Frölich

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Abstract

Choosing among a number of available treatments the most suitable for a given subject is an issue of everyday concern. A physician has to choose an appropriate drug treatment or medical treatment for a given patient, based on a number of observed covariates X and prior experience. A case worker in an unemployment office has to choose among a variety of available active labour market programmes for unemployed job seekers. In this paper, two methodological advancements are developed: First, this methodology permits to combine a data set on previously treated individuals with a data set on new clients when the regressors available in these two data sets do not coincide. It thereby incorporates additional regressors on previously treated that are not available for the current clients. Such a situation often arises due to cost considerations, data confidentiality reasons or time delays in data availability. Second, statistical inference on the recommended treatment choice is analyzed and conveyed to the agent, physician or case worker in a comprehensible and transparent way. The implementation of this methodology in a pilot study in Switzerland for choosing among active labour market programmes (ALMP) for unemployed job seekers is described.

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Bibliographic Info

Paper provided by Department of Economics, University of St. Gallen in its series University of St. Gallen Department of Economics working paper series 2006 with number 2006-14.

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Length: 47 pages
Date of creation: Jun 2006
Date of revision:
Handle: RePEc:usg:dp2006:2006-14

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Keywords: Statistical treatment rules; active labour market policies;

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References

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  1. Frölich, Markus & Lechner, Michael & Steiger, Heidi, 2003. "Statistically assisted programme selection - International experiences and potential benefits for Switzerland," Working Paper Series 2004:1, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  2. Fredriksson, Peter & Johansson, Per, 2002. "Program Evaluation and Random Program Starts," Working Paper Series 2003:1, Uppsala University, Department of Economics.
  3. Randall W. Eberts, 2005. "After the doors close: assisting laid-off workers to find jobs," Economic Perspectives, Federal Reserve Bank of Chicago, issue Q II, pages 75-85.
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  5. Michael Lechner & Jeffrey Smith, 2003. "What is the Value Added by Caseworkers?," University of St. Gallen Department of Economics working paper series 2003 2003-05, Department of Economics, University of St. Gallen.
  6. 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.
  7. Randall W. Eberts, . "After the Doors Close: Assisting Laid-Off Workers to Find Jobs," Upjohn Working Papers and Journal Articles rwe2005, W.E. Upjohn Institute for Employment Research.
  8. 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, vol. 17(1), pages 74-90, January.
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  17. Gerfin, Michael & Lechner, Michael, 2000. "Microeconometric Evaluation of the Active Labour Market Policy in Switzerland," IZA Discussion Papers 154, Institute for the Study of Labor (IZA).
  18. Heckman, James J & Smith, Jeffrey, 1997. "Making the Most Out of Programme Evaluations and Social Experiments: Accounting for Heterogeneity in Programme Impacts," Review of Economic Studies, Wiley Blackwell, vol. 64(4), pages 487-535, October.
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  22. Robert G. Fay, 1996. "Enhancing the Effectiveness of Active Labour Market Policies: Evidence from Programme Evaluations in OECD Countries," OECD Labour Market and Social Policy Occasional Papers 18, OECD Publishing.
  23. Heckman, James J & Ichimura, Hidehiko & Todd, Petra, 1998. "Matching as an Econometric Evaluation Estimator," Review of Economic Studies, Wiley Blackwell, vol. 65(2), pages 261-94, April.
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Cited by:
  1. Behncke, Stefanie & Frölich, Markus & Lechner, Michael, 2007. "Targeting Labour Market Programmes: Results from a Randomized Experiment," IZA Discussion Papers 3085, Institute for the Study of Labor (IZA).
  2. Stefanie Behncke & Markus Frölich & Michael Lechner, 2006. "Statistical Assistance for Programme Selection - For a Better Targeting of Active Labour Market Policies in Switzerland," University of St. Gallen Department of Economics working paper series 2006 2006-09, Department of Economics, University of St. Gallen.
  3. Staghøj, Jonas & Svarer, Michael & Rosholm, Michael, 2007. "A Statistical Programme Assignment Model," IZA Discussion Papers 3165, Institute for the Study of Labor (IZA).
  4. Stefanie Behncke & Markus Frölich & Michael Lechner, 2006. "Aktive Arbeitsmarktpolitik in Deutschland und der Schweiz: eine Gegenüberstellung," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 75(3), pages 118-154.

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