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Peer Effects in the Adoption of a Youth Employment Subsidy

Author

Listed:
  • Claudio A. Mora-García
  • Tomás Rau

Abstract

This paper studies the effects of peers in the adoption of a Youth Employment Subsidy in Chile since its inception. We study the effects that former classmates’ and coworkers’ adoption has on one’s adoption. Identification comes from discontinuities in the assignment rule that allow us to construct valid instrumental variables for peers’ adoption. Using a comprehensive set of administrative records, we find that classmates and, especially, coworkers play a significant role in the adoption of the subsidy. Peer effects are determined during the early stages of the program’s implementation and vary by network characteristics and the strength of network ties.

Suggested Citation

  • Claudio A. Mora-García & Tomás Rau, 2018. "Peer Effects in the Adoption of a Youth Employment Subsidy," Documentos de Trabajo LACEA 016839, The Latin American and Caribbean Economic Association - LACEA.
  • Handle: RePEc:col:000518:016839
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    File URL: http://vox.lacea.org/files/Working_Papers/lacea_wps_0015_mora_rau.pdf
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    References listed on IDEAS

    as
    1. Sandra E. Black & Paul J. Devereux & Kjell G. Salvanes, 2013. "Under Pressure? The Effect of Peers on Outcomes of Young Adults," Journal of Labor Economics, University of Chicago Press, vol. 31(1), pages 119-153.
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    3. Rita Almeida & Larry Orr & David Robalino, 2014. "Wage subsidies in developing countries as a tool to build human capital: design and implementation issues," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-24, December.
    4. Gustavo J. Bobonis & Frederico Finan, 2009. "Neighborhood Peer Effects in Secondary School Enrollment Decisions," The Review of Economics and Statistics, MIT Press, vol. 91(4), pages 695-716, November.
    5. Anna Aizer, 2007. "Public Health Insurance, Program Take-Up, and Child Health," The Review of Economics and Statistics, MIT Press, vol. 89(3), pages 400-415, August.
    6. Robert A. Moffitt, 2003. "Means-Tested Transfer Programs in the United States," NBER Books, National Bureau of Economic Research, Inc, number moff03-1, June.
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    More about this item

    Keywords

    Peer effects; subsidy adoption; partial population approach.;
    All these keywords.

    JEL classification:

    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models

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