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Evaluating Search and Matching Models Using Experimental Data

Author Info

Listed author(s):
  • Lise, Jeremy

    ()

    (Queen's University)

  • Seitz, Shannon

    ()

    (Queen's University)

  • Smith, Jeffrey A.

    ()

    (University of Michigan)

Abstract

This paper introduces an innovative test of search and matching models using the exogenous variation available in experimental data. We take an off-the-shelf Pissarides matching model and calibrate it to data on the control group from a randomized social experiment. We then simulate a program group from a randomized experiment within the model. As a measure of the performance of the model, we compare the outcomes of the program groups from the model and from the randomized experiment. We illustrate our methodology using the Canadian Self-Sufficiency Project (SSP), a social experiment providing a time limited earnings supplement for Income Assistance recipients who obtain full time employment within a 12 month period. We find two features of the model are consistent with the experimental results: endogenous search intensity and exogenous job destruction. We find mixed evidence in support of the assumption of fixed hours of labor supply. Finally, we find a constant job destruction rate is not consistent with the experimental data in this context.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1717.

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Length: 47 pages
Date of creation: Aug 2005
Handle: RePEc:iza:izadps:dp1717
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Keywords: calibration; equilibrium search and matching models; policy experiments; Self-Sufficiency Project; welfare; social experiments;

Other versions of this item:

Find related papers by JEL classification:
  • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
  • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
  • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers

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Cited by:

  1. Lise, Jeremy & Seitz, Shannon & Smith, Jeffrey A., 2003. "Equilibrium Policy Experiments and the Evaluation of Social Programs," IZA Discussion Papers 758, Institute for the Study of Labor (IZA).
  2. Riddell, Chris & Riddell, W. Craig, 2016. "When Can Experimental Evidence Mislead? A Re-Assessment of Canada's Self Sufficiency Project," IZA Discussion Papers 9939, Institute for the Study of Labor (IZA).
  3. André Decoster & Pieter Vanleenhove, 2012. "In-Work Tax Credits in Belgium :An Analysis of the Jobkorting Using a Discrete Labour Supply Model," Brussels Economic Review, ULB -- Universite Libre de Bruxelles, vol. 55(2), pages 121-150.
  4. Joseph P. Kaboski & Robert M. Townsend, 2011. "A Structural Evaluation of a Large‐Scale Quasi‐Experimental Microfinance Initiative," Econometrica, Econometric Society, vol. 79(5), pages 1357-1406, 09.
  5. Wasmer, Etienne & Woll, Cornelia, 2011. "Scientific project, Sciences Po | LIEPP laboratoire interdisciplinaire d'evaluation des politiques publiques or in english, interdisciplinary research center for the evaluation of public policies," MPRA Paper 31434, University Library of Munich, Germany.
  6. Charles Bellemare & Bruce Shearer, 2011. "On The Relevance And Composition Of Gifts Within The Firm: Evidence From Field Experiments," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 52(3), pages 855-882, 08.
  7. Kling, Jeffrey R., 2007. "Methodological Frontiers of Public Finance Field Experiments," National Tax Journal, National Tax Association, vol. 60(1), pages 109-127, March.
  8. Angelucci, Manuela & De Giorgi, Giacomo, 2006. "Indirect Effects of an Aid Program: The Case of Progresa and Consumption," IZA Discussion Papers 1955, Institute for the Study of Labor (IZA).
  9. Pieter Gautier, 2017. "Estimating Equilibrium Effects of Job Search Assistance," 2017 Meeting Papers 188, Society for Economic Dynamics.
  10. Card, David & Hyslop, Dean R., 2009. "The dynamic effects of an earnings subsidy for long-term welfare recipients: Evidence from the self sufficiency project applicant experiment," Journal of Econometrics, Elsevier, vol. 153(1), pages 1-20, November.

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