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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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  1. Frijters, Paul & van der Klaauw, Bas, 2003. "Job Search with Nonparticipation," CEPR Discussion Papers 3922, C.E.P.R. Discussion Papers.
  2. van den Berg, Gerard J. & van Vuuren, Aico, 2010. "The effect of search frictions on wages," Labour Economics, Elsevier, vol. 17(6), pages 875-885, December.
  3. Albrecht, James & Axell, Bo, 1983. "An Equilibrium Model of Search Unemployment," Working Papers 83-10, C.V. Starr Center for Applied Economics, New York University.
  4. van den Berg, Gerard J. & van der Klaauw, Bas, 2001. "Counseling and Monitoring of Unemployed Workers: Theory and Evidence from a Controlled Social Experiment," IZA Discussion Papers 374, Institute for the Study of Labor (IZA).
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  7. 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.
  8. 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.
  9. Vikström, Johan & Rosholm, Michael & Svarer, Michael, 2011. "The Relative Efficiency of Active Labour Market Policies: Evidence from a Social Experiment and Non-Parametric Methods," IZA Discussion Papers 5596, Institute for the Study of Labor (IZA).
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  12. 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.
  13. Cahuc, Pierre & Le Barbanchon, Thomas, 2010. "Labor market policy evaluation in equilibrium: Some lessons of the job search and matching model," Labour Economics, Elsevier, vol. 17(1), pages 196-205, January.
  14. Ridder, G. & Tunali, I., 1997. "Stratified Partial Likelihood Estimation," Papers 1997/17, Koc University.
  15. Esther Duflo & Pascaline Dupas & Michael Kremer, 2011. "Peer Effects, Teacher Incentives, and the Impact of Tracking: Evidence from a Randomized Evaluation in Kenya," American Economic Review, American Economic Association, vol. 101(5), pages 1739-74, August.
  16. Bruno Crépon & Esther Duflo & Marc Gurgand & Roland Rathelot & Philippe Zamora, 2013. "Do Labor Market Policies have Displacement Effects? Evidence from a Clustered Randomized Experiment," The Quarterly Journal of Economics, Oxford University Press, vol. 128(2), pages 531-580.
  17. Jeremy Lise & Shannon Seitz & Jeffrey Smith, 2004. "Equilibrium Policy Experiments and the Evaluation of Social Programs," NBER Working Papers 10283, National Bureau of Economic Research, Inc.
  18. Fougère, Denis & Pradel, Jacqueline & Roger, Muriel, 2008. "Does the Public Employment Service Affect Search Effort and Outcomes?," CEPR Discussion Papers 7095, C.E.P.R. Discussion Papers.
  19. 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.
  20. 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.
  21. Christopher A. Pissarides, 2000. "Equilibrium Unemployment Theory, 2nd Edition," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262161877, June.
  22. Diamond, Peter A, 1982. "Aggregate Demand Management in Search Equilibrium," Journal of Political Economy, University of Chicago Press, vol. 90(5), pages 881-94, October.
  23. 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.
  24. 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).
  25. Ferracci, Marc & Jolivet, Gregóry & van den Berg, Gerard J., 2010. "Treatment evaluation in the case of interactions within markets," Working Paper Series 2010:1, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  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. Cees Gorter & Guyonne R. J. Kalb, 1996. "Estimating the Effect of Counseling and Monitoring the Unemployed Using a Job Search Model," Journal of Human Resources, University of Wisconsin Press, vol. 31(3), pages 590-610.
  28. 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.
  29. 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.
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