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Dynamic Treatment Assignment – The Consequences for Evaluations Using Observational Data

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  • Fredriksson, Peter

    () (Stockholm University)

  • Johansson, Per

    () (Uppsala University)

Abstract

This paper discusses the evaluation problem using observational data when the timing of treatment is an outcome of a stochastic process. We show that the duration framework in discrete time provides a fertile ground for effect evaluations. We suggest easy-to-use nonparametric survival function matching estimators. These estimators can be used to estimate the time profile of the treatment. We apply one of the estimators to evaluate the effects of an employment subsidies program. The longer run program effects are positive. The estimated time profile suggests locking-in effects while participating in the program and a big upward jump in the employment hazard upon program completion.

Suggested Citation

  • Fredriksson, Peter & Johansson, Per, 2004. "Dynamic Treatment Assignment – The Consequences for Evaluations Using Observational Data," IZA Discussion Papers 1062, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp1062
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    References listed on IDEAS

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    1. Michael Lechner, 2002. "Program Heterogeneity And Propensity Score Matching: An Application To The Evaluation Of Active Labor Market Policies," The Review of Economics and Statistics, MIT Press, vol. 84(2), pages 205-220, May.
    2. Per-Anders Edin & Magnus Gustavsson, 2008. "Time Out of Work and Skill Depreciation," ILR Review, Cornell University, ILR School, vol. 61(2), pages 163-180, January.
    3. Forslund, Anders & Johansson, Per & Lindqvist, Linus, 2004. "Employment subsidies - A fast lane from unemployment to work?," Working Paper Series 2004:18, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    4. Rafael Lalive & Jan C. van Ours & Josef Zweimueller, "undated". "The Impact of Active Labor Market Programs on the Duration of Unemployment," IEW - Working Papers 041, Institute for Empirical Research in Economics - University of Zurich.
    5. Michael Gerfin & Michael Lechner, 2002. "A Microeconometric Evaluation of the Active Labour Market Policy in Switzerland," Economic Journal, Royal Economic Society, vol. 112(482), pages 854-893, October.
    6. Fredriksson, Peter & Johansson, Per, 2002. "Program evaluation and random program starts," Working Paper Series 2003:1, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    7. Carling, Kenneth & Richardson, Katarina, 2001. "The relative efficiency of labor market programs: Swedish experience from the 1990's," Working Paper Series 2001:2, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    8. Lechner, Michael, 1999. "Earnings and Employment Effects of Continuous Off-the-Job Training in East Germany after Unification," Journal of Business & Economic Statistics, American Statistical Association, vol. 17(1), pages 74-90, January.
    9. Sianesi, Barbara, 2001. "An evaluation of the active labour market programmes in Sweden," Working Paper Series 2001:5, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    10. Jaap H. Abbring & Gerard J. van den Berg, 2003. "The Nonparametric Identification of Treatment Effects in Duration Models," Econometrica, Econometric Society, vol. 71(5), pages 1491-1517, September.
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    Citations

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    Cited by:

    1. Marco Caliendo, 2009. "Start-up subsidies in East Germany: finally, a policy that works?," International Journal of Manpower, Emerald Group Publishing, vol. 30(7), pages 625-647, November.
    2. Bernd Fitzenberger & Aderonke Osikominu & Robert Völter, 2008. "Get Training or Wait? Long-Run Employment Effects of Training Programs for the Unemployed in West Germany," Annals of Economics and Statistics, GENES, issue 91-92, pages 321-355.
    3. Michael Lechner & Conny Wunsch, 2009. "Are Training Programs More Effective When Unemployment Is High?," Journal of Labor Economics, University of Chicago Press, vol. 27(4), pages 653-692, October.
    4. Hujer, Reinhard & Thomsen, Stephan L., 2006. "Wirksamkeit von Arbeitsbeschaffungsmaßnahmen in Deutschland : empirische Befunde mikroökonometrischer Analysen (Effectiveness of job creation schemes in Germany : empirical findings from microeconomet," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 39(3/4), pages 329-345.
    5. 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.
    6. Inés Hardoy, 2005. "Impact of Multiple Labour Market Programmes on Multiple Outcomes: The Case of Norwegian Youth Programmes," LABOUR, CEIS, vol. 19(3), pages 425-467, September.
    7. Hans J. Baumgartner & Marco Caliendo, 2008. "Turning Unemployment into Self-Employment: Effectiveness of Two Start-Up Programmes," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 70(3), pages 347-373, June.
    8. Biewen, Martin & Fitzenberger, Bernd & Osikominu, Aderonke & Waller, Marie, 2007. "Which Program for Whom? Evidence on the Comparative Effectiveness of Public Sponsored Training Programs in Germany," IZA Discussion Papers 2885, Institute for the Study of Labor (IZA).
    9. Caliendo Marco & Hujer Reinhard & Thomsen Stephan L., 2006. "Sectoral Heterogeneity in the Employment Effects of Job Creation Schemes in Germany," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 226(2), pages 139-179, April.
    10. Conny Wunsch & Michael Lechner, 2008. "What Did All the Money Do? On the General Ineffectiveness of Recent West German Labour Market Programmes," Kyklos, Wiley Blackwell, vol. 61(1), pages 134-174, February.
    11. Caliendo, Marco & Künn, Steffen & Schmidl, Ricarda, 2011. "Fighting Youth Unemployment: The Effects of Active Labor Market Policies," IZA Discussion Papers 6222, Institute for the Study of Labor (IZA).
    12. Stephan Gesine, 2008. "The Effects of Active Labor Market Programs in Germany: An Investigation Using Different Definitions of Non-Treatment," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 228(5-6), pages 586-611, October.
    13. Biewen, Martin & Fitzenberger, Bernd & Osikominu, Aderonke & Völter, Robert & Waller, Marie, 2006. "Beschäftigungseffekte ausgewählter Maßnahmen der beruflichen Weiterbildung in Deutschland : eine Bestandsaufnahme (Effects of selected measures of further vocational training in Germany : an appraisal," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 39(3/4), pages 365-390.
    14. Jespersen, Svend T. & Munch, Jakob R. & Skipper, Lars, 2008. "Costs and benefits of Danish active labour market programmes," Labour Economics, Elsevier, vol. 15(5), pages 859-884, October.
    15. Fitzenberger, Bernd & Volter, Robert, 2007. "Long-run effects of training programs for the unemployed in East Germany," Labour Economics, Elsevier, vol. 14(4), pages 730-755, August.
    16. D. Zeng & D. Y. Lin, 2007. "Maximum likelihood estimation in semiparametric regression models with censored data," Journal of the Royal Statistical Society Series B, Royal Statistical Society, vol. 69(4), pages 507-564.
    17. Bernhard, Sarah & Gartner, Hermann & Stephan, Gesine, 2008. "Wage Subsidies for Needy Job-Seekers and Their Effect on Individual Labour Market Outcomes after the German Reforms," IZA Discussion Papers 3772, Institute for the Study of Labor (IZA).
    18. Forslund, Anders & Johansson, Per & Lindqvist, Linus, 2004. "Employment subsidies - A fast lane from unemployment to work?," Working Paper Series 2004:18, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    19. Hujer, Reinhard & Thomsen, Stephan L. & Zeiss, Christopher, 2006. "The effects of short-term training measures on the individual unemployment duration in West Germany," ZEW Discussion Papers 06-065, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    20. Johansson, Per, 2006. "Using internal replication to establish a treatment effect," Working Paper Series 2006:3, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    21. Ursula Jaenichen & Gesine Stephan, 2011. "The effectiveness of targeted wage subsidies for hard-to-place workers," Applied Economics, Taylor & Francis Journals, vol. 43(10), pages 1209-1225.
    22. Hujer, Reinhard & Thomsen, Stephan L., 2006. "Wirksamkeit von Arbeitsbeschaffungsmaßnahmen in Deutschland: Empirische Befunde mikroökonometrischer Analysen," ZEW Discussion Papers 06-054, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    23. de Luna, Xavier & Johansson, Per, 2007. "Matching estimators for the effect of a treatment on survival times," Working Paper Series 2007:1, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    24. Christian, GOEBEL, 2006. "The effect of temporary employment subsidies on employment duration," Discussion Papers (ECON - Département des Sciences Economiques) 2006035, Université catholique de Louvain, Département des Sciences Economiques.
    25. Stephan, Gesine & Pahnke, André, 2008. "The Relative Effectiveness of Selected Active Labour Market Programmes and the Common Support Problem," IZA Discussion Papers 3767, Institute for the Study of Labor (IZA).

    More about this item

    Keywords

    method of matching; dynamic treatment assignment; treatment effects; program evaluation;

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies

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