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Testing Search Theory with Reemployment Bonus Experiments: Cross-Validation of Results from New Jersey and Illinois


  • Phillip B. Levine

    (Wellesley College)


This paper assesses the ability of a simple search-theoretic model to explain the results of two controlled reemployment bonus experiments. The availability of two independent experiments with substantially different treatments allows for a rigorous test of the model. Parameters of the model are estimated by minimizing the distance between the observed and predicted aggregate response in each experiment, then cross-validated using the observed and predicted treatment response from the other experiment. The model provides qualitative predictions that match the observed results quite well, but is unable to predict an effect as large as that observed in one of the experiments.

Suggested Citation

  • Phillip B. Levine, 1993. "Testing Search Theory with Reemployment Bonus Experiments: Cross-Validation of Results from New Jersey and Illinois," Eastern Economic Journal, Eastern Economic Association, vol. 19(2), pages 125-141, Spring.
  • Handle: RePEc:eej:eeconj:v:19:y:1993:i:2:p:125-141

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    References listed on IDEAS

    1. Devine, Theresa J. & Kiefer, Nicolas M., 1991. "Empirical Labor Economics: The Search Approach," OUP Catalogue, Oxford University Press, number 9780195059366, June.
    2. Woodbury, Stephen A & Spiegelman, Robert G, 1987. "Bonuses to Workers and Employers to Reduce Unemployment: Randomized Trials in Illinois," American Economic Review, American Economic Association, vol. 77(4), pages 513-530, September.
    3. Lawrence F. Katz, 1986. "Layoffs, Recall and the Duration of Unemployment," NBER Working Papers 1825, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Bruce D. Meyer, 1992. "Policy Lessons from the U.S. Unemployment Experiments," NBER Working Papers 4197, National Bureau of Economic Research, Inc.

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    JEL classification:

    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search


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