IDEAS home Printed from https://ideas.repec.org/p/ces/ceswps/_5476.html
   My bibliography  Save this paper

Estimating Equilibrium Effects of Job Search Assistance

Author

Listed:
  • Pieter A. Gautier
  • Paul Muller
  • Bas van der Klaauw
  • Michael Rosholm
  • Michael Svarer

Abstract

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 we 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.

Suggested Citation

  • Pieter A. Gautier & Paul Muller & Bas van der Klaauw & Michael Rosholm & Michael Svarer, 2015. "Estimating Equilibrium Effects of Job Search Assistance," CESifo Working Paper Series 5476, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_5476
    as

    Download full text from publisher

    File URL: http://www.cesifo-group.de/DocDL/cesifo1_wp5476.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Christopher A. Pissarides, 2000. "Equilibrium Unemployment Theory, 2nd Edition," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262161877, January.
    2. 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.
    3. Paul Frijters & Bas van der Klaauw, 2006. "Job Search with Nonparticipation," Economic Journal, Royal Economic Society, vol. 116(508), pages 45-83, January.
    4. LaLonde, Robert J, 1986. "Evaluating the Econometric Evaluations of Training Programs with Experimental Data," American Economic Review, American Economic Association, vol. 76(4), pages 604-620, September.
    5. 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, August.
    6. Smith, A A, Jr, 1993. "Estimating Nonlinear Time-Series Models Using Simulated Vector Autoregressions," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 8(S), pages 63-84, Suppl. De.
    7. 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.
    8. Albrecht, James W & Axell, Bo, 1984. "An Equilibrium Model of Search Unemployment," Journal of Political Economy, University of Chicago Press, vol. 92(5), pages 824-840, October.
    9. Gary Solon & Ryan Michaels & Michael W. L. Elsby, 2009. "The Ins and Outs of Cyclical Unemployment," American Economic Journal: Macroeconomics, American Economic Association, vol. 1(1), pages 84-110, January.
    10. Jeremy Lise & Shannon Seitz & Jeffrey Smith, 2015. "Evaluating search and matching models using experimental data," IZA Journal of Labor Economics, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-35, December.
    11. Ashenfelter, Orley & Ashmore, David & Deschenes, Olivier, 2005. "Do unemployment insurance recipients actively seek work? Evidence from randomized trials in four U.S. States," Journal of Econometrics, Elsevier, vol. 125(1-2), pages 53-75.
    12. 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.
    13. Bruce D. Meyer, 1995. "Lessons from the U.S. Unemployment Insurance Experiments," Journal of Economic Literature, American Economic Association, vol. 33(1), pages 91-131, March.
    14. 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.
    15. James Albrecht & Gerard van den Berg & Susan Vroman, 2009. "The Aggregate Labor Market Effects of the Swedish Knowledge Lift Program," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 12(1), pages 129-146, January.
    16. Gourieroux, C & Monfort, A & Renault, E, 1993. "Indirect Inference," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 8(S), pages 85-118, Suppl. De.
    17. 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.
    18. James Albrecht & Pieter A. Gautier & Susan Vroman, 2006. "Equilibrium Directed Search with Multiple Applications," Review of Economic Studies, Oxford University Press, vol. 73(4), pages 869-891.
    19. Heckman, James J & Lochner, Lance & Taber, Christopher, 1998. "General-Equilibrium Treatment Effects: A Study of Tuition Policy," American Economic Review, American Economic Association, vol. 88(2), pages 381-386, May.
    20. Rafael Lalive & Camille Landais & Josef Zweimüller, 2015. "Market Externalities of Large Unemployment Insurance Extension Programs," American Economic Review, American Economic Association, vol. 105(12), pages 3564-3596, December.
    21. James J. Heckman & Edward Vytlacil, 2005. "Structural Equations, Treatment Effects, and Econometric Policy Evaluation," Econometrica, Econometric Society, vol. 73(3), pages 669-738, May.
    22. 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 1739-1774, August.
    23. Moretti, Enrico, 2004. "Estimating the social return to higher education: evidence from longitudinal and repeated cross-sectional data," Journal of Econometrics, Elsevier, vol. 121(1-2), pages 175-212.
    24. Greenberg, David H. & Robins, Philip K., 2008. "Incorporating nonmarket time into benefit-cost analyses of social programs: An application to the self-sufficiency project," Journal of Public Economics, Elsevier, vol. 92(3-4), pages 766-794, April.
    25. Orazio P. Attanasio & Costas Meghir & Ana Santiago, 2012. "Education Choices in Mexico: Using a Structural Model and a Randomized Experiment to Evaluate PROGRESA," Review of Economic Studies, Oxford University Press, vol. 79(1), pages 37-66.
    26. Marc FERRACCI & Grégory JOLIVET & Gerard J van den Berg, 2009. "Treatment Evaluation in the Case of Interaction Within Markets," Working Papers 2009-22, Center for Research in Economics and Statistics.
    27. Rosholm, Michael, 2008. "Experimental Evidence on the Nature of the Danish Employment Miracle," IZA Discussion Papers 3620, Institute for the Study of Labor (IZA).
    28. Richard Blundell & Monica Costa Dias & Costas Meghir & John Van Reenen, 2004. "Evaluating the Employment Impact of a Mandatory Job Search Program," Journal of the European Economic Association, MIT Press, vol. 2(4), pages 569-606, June.
    29. David Card & Dean R. Hyslop, 2005. "Estimating the Effects of a Time-Limited Earnings Subsidy for Welfare-Leavers," Econometrica, Econometric Society, vol. 73(6), pages 1723-1770, November.
    30. Dolton, Peter & O'Neill, Donal, 1996. "Unemployment Duration and the Restart Effect: Some Experimental Evidence," Economic Journal, Royal Economic Society, vol. 106(435), pages 387-400, March.
    31. 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, January.
    32. 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.
    33. Diamond, Peter A, 1982. "Aggregate Demand Management in Search Equilibrium," Journal of Political Economy, University of Chicago Press, vol. 90(5), pages 881-894, October.
    34. 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.
    35. Graversen, Brian Krogh & van Ours, Jan C., 2008. "How to help unemployed find jobs quickly: Experimental evidence from a mandatory activation program," Journal of Public Economics, Elsevier, vol. 92(10-11), pages 2020-2035, October.
    36. Christian Holzner & Makoto Watanabe, 2016. "Understanding the Role of the Public Employment Agency," Tinbergen Institute Discussion Papers 16-041/VII, Tinbergen Institute.
    37. 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.
    38. 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.
    39. Ridder, Geert & Tunali, Insan, 1999. "Stratified partial likelihood estimation," Journal of Econometrics, Elsevier, vol. 92(2), pages 193-232, October.
    40. Kenneth I. Wolpin & Petra E. Todd, 2006. "Assessing the Impact of a School Subsidy Program in Mexico: Using a Social Experiment to Validate a Dynamic Behavioral Model of Child Schooling and Fertility," American Economic Review, American Economic Association, vol. 96(5), pages 1384-1417, December.
    41. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-In-Differences Estimates?," The Quarterly Journal of Economics, Oxford University Press, vol. 119(1), pages 249-275.
    42. 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, June.
    43. Robert Shimer, 2012. "Reassessing the Ins and Outs of Unemployment," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 15(2), pages 127-148, April.
    44. 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.
    45. Eberwein, Curtis & Ham, John C. & LaLonde, Robert J., 2002. "Alternative methods of estimating program effects in event history models," Labour Economics, Elsevier, vol. 9(2), pages 249-278, April.
    46. Dan A. Black & Jeffrey A. Smith & Mark C. Berger & Brett J. Noel, 2003. "Is the Threat of Reemployment Services More Effective Than the Services Themselves? Evidence from Random Assignment in the UI System," American Economic Review, American Economic Association, vol. 93(4), pages 1313-1327, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Landeghem, Bert Van & Cörvers, Frank & Grip, Andries de, 2017. "Is there a rationale to contact the unemployed right from the start? Evidence from a natural field experiment," Labour Economics, Elsevier, vol. 45(C), pages 158-168.
    2. Michael Rosholm, 2014. "Do case workers help the unemployed?," IZA World of Labor, Institute for the Study of Labor (IZA), pages 1-72, August.
    3. Rafael Lalive & Camille Landais & Josef Zweimüller, 2015. "Market Externalities of Large Unemployment Insurance Extension Programs," American Economic Review, American Economic Association, vol. 105(12), pages 3564-3596, December.
    4. Blasco, Sylvie & Pertold-Gebicka, Barbara, 2013. "Employment policies, hiring practices and firm performance," Labour Economics, Elsevier, vol. 25(C), pages 12-24.
    5. Elias Einiö & Henry G. Overman, 2016. "The (Displacement) Effects of Spatially Targeted Enterprise Initiatives: Evidence from UK LEGI," SERC Discussion Papers 0191, Spatial Economics Research Centre, LSE.
    6. van den Berg, Gerard J. & van der Klaauw, Bas, 2013. "Structural Empirical Evaluation of Job Search Monitoring," IZA Discussion Papers 7740, Institute for the Study of Labor (IZA).
    7. Parag A. Pathak & Alvin E. Roth, 2013. "Matching with Couples: Stability and Incentives in Large Markets," The Quarterly Journal of Economics, Oxford University Press, vol. 128(4), pages 1585-1632.
    8. Jeremy Lise & Shannon Seitz & Jeffrey Smith, 2015. "Evaluating search and matching models using experimental data," IZA Journal of Labor Economics, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-35, December.
    9. Vikström, Johan & Rosholm, Michael & Svarer, Michael, 2013. "The effectiveness of active labor market policies: Evidence from a social experiment using non-parametric bounds," Labour Economics, Elsevier, vol. 24(C), pages 58-67.
    10. repec:spr:izalpo:v:6:y:2017:i:1:d:10.1186_s40173-017-0094-0 is not listed on IDEAS
    11. Eichhorst, Werner & Konle-Seidl, Regina, 2016. "Evaluating Labour Market Policy," IZA Discussion Papers 9966, Institute for the Study of Labor (IZA).
    12. repec:eee:pubeco:v:153:y:2017:i:c:p:56-68 is not listed on IDEAS
    13. repec:eee:labeco:v:47:y:2017:i:c:p:182-201 is not listed on IDEAS
    14. Peter Mueser & Marios Michaelides, 2015. "Are Reemployment Services Effective? Experimental Evidence from the Great Recession," Working Papers 18-04, Department of Economics, University of Missouri, revised Feb 2018.
    15. Bergemann, Annette & Pohlan, Laura & Uhlendorff, Arne, 2017. "The impact of participation in job creation schemes in turbulent times," Labour Economics, Elsevier, vol. 47(C), pages 182-201.
    16. Sørensen, Kenneth Lykke, 2016. "Heterogeneous impacts on earnings from an early effort in labor market programs," Labour Economics, Elsevier, vol. 41(C), pages 266-279.
    17. Torben Andersen & Michael Svarer, 2012. "Active labour market policies in a recession," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 1(1), pages 1-19, December.
    18. Boockmann, Bernhard & Osiander, Christopher & Stops, Michael & Verbeek, Hans, 2013. "Effekte von Vermittlerhandeln und Vermittlerstrategien im SGB II und SGB III (Pilotstudie) : Abschlussbericht an das IAB durch das Institut für Angewandte Wirtschaftsforschung e. V. (IAW), Tübingen," IAB-Forschungsbericht 201307, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    19. Andrew C. Johnston & Alexandre Mas, 2015. "Potential Unemployment Insurance Duration and Labor Supply: The Individual and Market-Level Response to a Benefit Cut," Working Papers 590, Princeton University, Department of Economics, Industrial Relations Section..
    20. Dayanand S. Manoli & Marios Michaelides & Ankur Patel, 2018. "Long-Term Effects of Job-Search Assistance: Experimental Evidence Using Administrative Tax Data," NBER Working Papers 24422, National Bureau of Economic Research, Inc.
    21. repec:iza:izawol:journl:y:2017:n:380 is not listed on IDEAS
    22. van der Klaauw, Bas, 2014. "From micro data to causality: Forty years of empirical labor economics," Labour Economics, Elsevier, vol. 30(C), pages 88-97.

    More about this item

    Keywords

    randomized experiment; policy-relevant treatment effects; job search; externalities; indirect inference;

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ces:ceswps:_5476. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Klaus Wohlrabe). General contact details of provider: http://edirc.repec.org/data/cesifde.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.