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Evaluating Search And Matching Models Using Experimental Data

Author

Listed:
  • Jeffrey Smith

    (University of Michigan)

  • Jeremy Lise

    (Economics Department, Queen's Universy)

  • Shannon N. Seitz

    (Department of Economics, Queen's University)

Abstract

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

Suggested Citation

  • Jeffrey Smith & Jeremy Lise & Shannon N. Seitz, 2006. "Evaluating Search And Matching Models Using Experimental Data," Working Paper 1074, Economics Department, Queen's University.
  • Handle: RePEc:qed:wpaper:1074
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    2. Tarek Azzam & Michael Bates & David Fairris, 2019. "Do Learning Communities Increase First Year College Retention? Testing Sample Selection and External Validity of Randomized Control Trials," Working Papers 202002, University of California at Riverside, Department of Economics.
    3. Lise, Jeremy & Seitz, Shannon & Smith, Jeffrey A., 2003. "Equilibrium Policy Experiments and the Evaluation of Social Programs," IZA Discussion Papers 758, Institute of Labor Economics (IZA).
    4. 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 of Labor Economics (IZA).
    5. 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.
    6. Claudia Allende & Francisco Gallego & Christopher Neilson, 2019. "Approximating The Equilibrium Effects of Informed School Choice," Working Papers 2019-16, Princeton University. Economics Department..
    7. Pierre Cahuc & Stéphane Carcillo & Thomas Le Barbanchon, 2019. "The Effectiveness of Hiring Credits," Review of Economic Studies, Oxford University Press, vol. 86(2), pages 593-626.
    8. 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, August.
    9. Angelucci, Manuela & De Giorgi, Giacomo, 2006. "Indirect Effects of an Aid Program: The Case of Progresa and Consumption," IZA Discussion Papers 1955, Institute of Labor Economics (IZA).
    10. Azzam, Tarek & Bates, Michael D. & Fairris, David, 2022. "Do learning communities increase first year college retention? Evidence from a randomized control trial," Economics of Education Review, Elsevier, vol. 89(C).
    11. Bruno Crépon & Gerard J. van den Berg, 2016. "Active Labor Market Policies," Annual Review of Economics, Annual Reviews, vol. 8(1), pages 521-546, October.
    12. Pieter Gautier & Paul Muller & Bas van der Klaauw & Michael Rosholm & Michael Svarer, 2018. "Estimating Equilibrium Effects of Job Search Assistance," Journal of Labor Economics, University of Chicago Press, vol. 36(4), pages 1073-1125.
    13. Miller, Grant & de Paula, Áureo & Valente, Christine, 2020. "Subjective Expectations and Demands for Contraception," CINCH Working Paper Series (since 2020) 73328, Duisburg-Essen University Library, DuEPublico.
    14. Maibom, Jonas, 2021. "The Danish Labor Market Experiments: Methods and Findings," Nationaløkonomisk tidsskrift, Nationaløkonomisk Forening, vol. 2021(1), pages 1-21.
    15. 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, September.
    16. Pierre Cahuc & Stéphane Carcillo & Thomas Le Barbanchon, 2017. "The Effectiveness of Hiring Credits," SciencePo Working papers hal-03393157, HAL.
    17. Sebastian Galiani & Juan Pantano, 2021. "Structural Models: Inception and Frontier," NBER Working Papers 28698, National Bureau of Economic Research, Inc.
    18. Kling, Jeffrey R., 2007. "Methodological Frontiers of Public Finance Field Experiments," National Tax Journal, National Tax Association;National Tax Journal, vol. 60(1), pages 109-127, March.
    19. 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.
    20. 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.
    21. Maibom, Jonas, 2021. "The Welfare Effects of Mandatory Reemployment Programs: Combining a Structural Model and Experimental Data," IZA Discussion Papers 14866, Institute of Labor Economics (IZA).
    22. Pierre Cahuc & Stéphane Carcillo & Thomas Le Barbanchon, 2019. "The Effectiveness of Hiring Credits," Sciences Po publications info:hdl:2441/2rcfhie1t29, Sciences Po.

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    More about this item

    Keywords

    equilibrium search and matching models; policy experiments; Self-Sufficiency Project; welfare; Calibration; social experiments;
    All these keywords.

    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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