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Estimating Equilibrium Effects of Job Search Assistance

  • Pieter Gautier

    (Free, University, Amsterdam)

  • Paul Muller

    (Free, University, Amsterdam)

  • Bas van der Klaauw,

    (Free, University, Amsterdam)

  • Michael Rosholm

    (Department of Economics and Business, Aarhus University, Denmark)

  • Michael Svarer

    ()

    (Department of Economics and Business, Aarhus University, Denmark)

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 e 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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Paper provided by School of Economics and Management, University of Aarhus in its series Economics Working Papers with number 2012-27.

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Length: 45
Date of creation: 08 Nov 2012
Date of revision:
Handle: RePEc:aah:aarhec:2012-27
Contact details of provider: Web page: http://www.econ.au.dk/afn/

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  3. Jeremy Lise & Shannon Seitz & Jeffrey Smith, 2003. "Equilibrium Policy Experiments and the Evaluation of Social Programs," Working Papers 1012, Queen's University, Department of Economics.
  4. Terry R. Johnson & Daniel H. Klepinger, 1994. "Experimental Evidence on Unemployment Insurance Work-Search Policies," Journal of Human Resources, University of Wisconsin Press, vol. 29(3), pages 665-717.
  5. Albrecht, James W & Axell, Bo, 1983. "An Equilibrium Model of Search Unemployment," Working Paper Series 99, Research Institute of Industrial Economics.
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  7. 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 9251, C.E.P.R. Discussion Papers.
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  11. Gerard J. van den Berg & Bas van der Klaauw, 2006. "Counseling And Monitoring Of Unemployed Workers: Theory And Evidence From A Controlled Social Experiment," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 47(3), pages 895-936, 08.
  12. Dale T. Mortensen, 1982. "The Matching Process as a Noncooperative Bargaining Game," NBER Chapters, in: The Economics of Information and Uncertainty, pages 233-258 National Bureau of Economic Research, Inc.
  13. 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.
  14. Duflo, Esther & Dupas, Pascaline & Kremer, Michael, 2008. "Peer Effects, Teacher Incentives, and the Impact of Tracking: Evidence from a Randomized Evaluation in Kenya," CEPR Discussion Papers 7043, C.E.P.R. Discussion Papers.
  15. Ferracci, Marc & Jolivet, Grégory & van den Berg, Gerard J., 2010. "Treatment Evaluation in the Case of Interactions within Markets," IZA Discussion Papers 4700, Institute for the Study of Labor (IZA).
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  18. Fougère, Denis & Pradel, Jacqueline & Roger, Muriel, 2009. "Does the public employment service affect search effort and outcomes?," European Economic Review, Elsevier, vol. 53(7), pages 846-869, October.
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  20. Gerard J. van den Berg & Aico van Vuuren, 2002. "The Effect of Search Frictions on Wages," 10th International Conference on Panel Data, Berlin, July 5-6, 2002 C1-2, International Conferences on Panel Data.
  21. Vikström, Johan & Rosholm, Michael & Svarer, Michael, 2011. "The Relative Efficiency of Active Labour Market Policies: Evidence From a Social Experiment and Non-Parametric Methods," Working Paper Series, Center for Labor Studies 2011:4, Uppsala University, Department of Economics.
  22. Christopher A. Pissarides, 2000. "Equilibrium Unemployment Theory, 2nd Edition," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262161877, June.
  23. 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).
  24. P. Diamond, 1980. "Aggregate Demand Management in Search Equilibrium," Working papers 268, Massachusetts Institute of Technology (MIT), Department of Economics.
  25. LaLonde, Robert J, 1986. "Evaluating the Econometric Evaluations of Training Programs with Experimental Data," American Economic Review, American Economic Association, vol. 76(4), pages 604-20, September.
  26. Gourieroux, C & Monfort, A & Renault, E, 1993. "Indirect Inference," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 8(S), pages S85-118, Suppl. De.
  27. Rosholm, Michael, 2008. "Experimental Evidence on the Nature of the Danish Employment Miracle," Working Papers 08-14, University of Aarhus, Aarhus School of Business, Department of Economics.
  28. 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.
  29. Enrico Moretti, 2002. "Estimating the Social Return to Higher Education: Evidence From Longitudinal and Repeated Cross-Sectional Data," NBER Working Papers 9108, National Bureau of Economic Research, Inc.
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