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Nonparametric Instrumental Variable Methods for Dynamic Treatment Evaluation

Author

Listed:
  • van den Berg, Gerard J.

    () (University of Bristol)

  • Bonev, Petyo

    () (MINES ParisTech)

  • Mammen, Enno

    () (Heidelberg University)

Abstract

We develop a nonparametric instrumental variable approach for the estimation of average treatment effects on hazard rates and conditional survival probabilities, without model structure. We derive constructive identification proofs for average treatment effects under noncompliance and dynamic selection, exploiting instrumental variation taking place during ongoing spells. We derive asymptotic distributions of the corresponding estimators. This includes a detailed examination of noncompliance in a dynamic context. In an empirical application, we evaluate the French labor market policy reform PARE which abolished the dependence of unemployment insurance benefits on the elapsed unemployment duration and simultaneously introduced additional active labor market policy measures. The estimated effect of the reform on the survival function of the duration of unemployment duration is positive and significant. Neglecting selectivity leads to an underestimation of the effects in absolute terms.

Suggested Citation

  • van den Berg, Gerard J. & Bonev, Petyo & Mammen, Enno, 2016. "Nonparametric Instrumental Variable Methods for Dynamic Treatment Evaluation," IZA Discussion Papers 9782, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp9782
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    References listed on IDEAS

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    1. Denis Fougère & Thierry Kamionka & Ana Prieto, 2010. "L'efficacité des mesures d'accompagnement sur le retour à l'emploi," Revue économique, Presses de Sciences-Po, vol. 61(3), pages 599-612.
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    More about this item

    Keywords

    hazard rate; duration variable; treatment effects; survival function; noncompliance; regression discontinuity design; unemployment; labor market policy reform; active labor market policy; unemployment benefits;

    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
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings

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