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Policy discontinuity and duration outcomes

Author

Listed:
  • van den Berg, Gerard J.

    () (IFAU - Institute for Evaluation of Labour Market and Education Policy)

  • Bozio, Antoine

    (Paris School of Economics)

  • Costa Dias, Mónica

    () (Institute for Fiscal Studies)

Abstract

Causal effects of a policy change on hazard rates of a duration outcome variable are not identified from a comparison of spells before and after the policy change, if there is unobserved heterogeneity in the effects and no model structure is imposed. We develop a discontinuity approach that overcomes this by considering spells that include the moment of the policy change and by exploiting variation in the moment at which different cohorts are exposed to the policy change. We prove identification of average treatment effects on hazard rates without model structure. We estimate these effects by kernel hazard regression. We use the introduction of the NDYP program for young unemployed individuals in the UK to estimate average program participation effects on the exit rate to work as well as anticipation effects.

Suggested Citation

  • van den Berg, Gerard J. & Bozio, Antoine & Costa Dias, Mónica, 2015. "Policy discontinuity and duration outcomes," Working Paper Series 2015:10, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  • Handle: RePEc:hhs:ifauwp:2015_010
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    References listed on IDEAS

    as
    1. Monica Costa Dias & Hidehiko Ichimura & Gerard Van Den Berg, 2007. "The matching method for treatment evaluation with selective participation and ineligibles," CeMMAP working papers CWP33/07, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
    2. John Van Reenen, 2004. "Active Labor Market Policies and the British New Deal for the Young Unemployed in Context," NBER Chapters,in: Seeking a Premier Economy: The Economic Effects of British Economic Reforms, 1980-2000, pages 461-496 National Bureau of Economic Research, Inc.
    3. Bruno Crépon & Marc Ferracci & Grégory Jolivet & Gerard J. van den Berg, 2009. "Active Labor Market Policy Effects in a Dynamic Setting," Journal of the European Economic Association, MIT Press, vol. 7(2-3), pages 595-605, 04-05.
    4. 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.
    5. Jens Perch Nielsen, 2001. "Boundary and Bias Correction in Kernel Hazard Estimation," Scandinavian Journal of Statistics, Danish Society for Theoretical Statistics;Finnish Statistical Society;Norwegian Statistical Association;Swedish Statistical Association, vol. 28(4), pages 675-698.
    6. Caroline Hall & Laura Hartman, 2010. "Moral hazard among the sick and unemployed: evidence from a Swedish social insurance reform," Empirical Economics, Springer, vol. 39(1), pages 27-50, August.
    7. Dorsett, Richard, 2006. "The new deal for young people: effect on the labour market status of young men," Labour Economics, Elsevier, vol. 13(3), pages 405-422, June.
    8. Meyer, Bruce D, 1996. "What Have We Learned from the Illinois Reemployment Bonus Experiment?," Journal of Labor Economics, University of Chicago Press, vol. 14(1), pages 26-51, January.
    9. Fredriksson, Peter & Johansson, Per, 2008. "Dynamic Treatment Assignment," Journal of Business & Economic Statistics, American Statistical Association, vol. 26, pages 435-445.
    10. Giacomi De Giorgi, 2005. "Long-term effects of a mandatory multistage program: the New Deal for young people in the UK," IFS Working Papers W05/08, Institute for Fiscal Studies.
    11. Abbring, Jaap H & van den Berg, Gerard J, 2005. "Social experiments and intrumental variables with duration outcomes," Working Paper Series 2005:11, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    12. Brinch, Christian N., 2007. "Nonparametric Identification Of The Mixed Hazards Model With Time-Varying Covariates," Econometric Theory, Cambridge University Press, vol. 23(02), pages 349-354, April.
    13. McVicar, Duncan & Jan M Podivinsky, 2003. "Unemployment Duration Before and After New Deal," Royal Economic Society Annual Conference 2003 153, Royal Economic Society.
    14. Brewer, Mike & Duncan, Alan & Shephard, Andrew & Suarez, Maria Jose, 2006. "Did working families' tax credit work? The impact of in-work support on labour supply in Great Britain," Labour Economics, Elsevier, vol. 13(6), pages 699-720, December.
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    Citations

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    Cited by:

    1. van der Klaauw, Bas & van Ours, Jan C., 2010. "Carrot and Stick: How Reemployment Bonuses and Benefit Sanctions Affect Job Finding Rates," IZA Discussion Papers 5055, Institute for the Study of Labor (IZA).
    2. Muller, Paul & van der Klaauw, Bas & Heyma, Arjan, 2017. "Comparing Econometric Methods to Empirically Evaluate Job-Search Assistance," Working Papers in Economics 691, University of Gothenburg, Department of Economics.
    3. Gerard J. van den Berg & Annette H. Bergemann & Marco Caliendo, 2009. "The Effect of Active Labor Market Programs on Not-Yet Treated Unemployed Individuals," Journal of the European Economic Association, MIT Press, vol. 7(2-3), pages 606-616, 04-05.
    4. Annette Bergemann & Marco Caliendo & Gerard J. van den Berg & Klaus F. Zimmermann, 2011. "The threat effect of participation in active labor market programs on job search behavior of migrants in Germany," International Journal of Manpower, Emerald Group Publishing, vol. 32(7), pages 777-795, October.
    5. Arni, Patrick & Berg, Gerard van den & Lalive, Rafael, 2015. "Treatment Versus Regime Effects of Carrots and Sticks," CEPR Discussion Papers 10913, C.E.P.R. Discussion Papers.
    6. Wapler, Rüdiger & Werner, Daniel & Wolf, Katja, 2014. "Active labour-market policies in Germany : do regional labour markets benefit?," IAB Discussion Paper 201428, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    7. Crépon, Bruno & Ferracci, Marc & Jolivet, Grégory & van den Berg, Gerard J., 2010. "Analyzing the Anticipation of Treatments Using Data on Notification Dates," IZA Discussion Papers 5265, Institute for the Study of Labor (IZA).
    8. Berg, Gerard J. van den & Bonev, Petyo & Mammen, Enno, 2016. "Nonparametric instrumental variable methods for dynamic treatment evaluation," Working Papers 16-02, University of Mannheim, Department of Economics.
    9. repec:eee:econom:v:206:y:2018:i:1:p:258-278 is not listed on IDEAS

    More about this item

    Keywords

    policy evaluation; hazard rate; identification; causality; regression discontinuity; selectivity; kernel hazard estimation; local linear regression; average treatment effect; job search assistance; youth unemployment;

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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