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Explaining and Forecasting Results of The Self-Sufficiency Project

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  • Christopher Ferrall

    () (Queen's University)

Abstract

This paper models the Self-Sufficiency Project (SSP), a controlled randomized experiment concerning welfare. The model of household behavior includes stochastic labor market skill, job opportunities, and value of non-labor market time. All the variation within and between treatment groups, jurisdictions (provinces), demographic groups, and sub-experiments is derived from four underlying sources: policy variation, endogenous selection into the experimental samples, the SSP treatments themselves, and different mixtures over 4 underlying types. Using the variation within the treatment group is quantitatively important for identifying the complex model: Efficient GMM the parameters are estimated precisely and variation within the treatment group is much more important for identification than either variation within the control group or between treatment and control groups. The model tracks the primary moments well within sample and out-of-sample except for under-estimating the difference in the entry sample. Predictions of the estimated model are computed for different welfare reform experiments. The details of the design are critical for interpretation of the results and it appears that the small SSP+ treatment may have longer lasting impacts than the an in-sample impact analysis would suggest.

Suggested Citation

  • Christopher Ferrall, 2008. "Explaining and Forecasting Results of The Self-Sufficiency Project," Working Papers 1165, Queen's University, Department of Economics.
  • Handle: RePEc:qed:wpaper:1165
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    File URL: http://qed.econ.queensu.ca/working_papers/papers/qed_wp_1165.pdf
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    References listed on IDEAS

    as
    1. Christopher Ferrall, 2002. "Estimation and Inference in Social Experiments," General Economics and Teaching 0209001, EconWPA.
    2. Keane, Michael & Moffitt, Robert, 1998. "A Structural Model of Multiple Welfare Program Participation and Labor Supply," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 39(3), pages 553-589, August.
    3. John Kennan & James R. Walker, 2011. "The Effect of Expected Income on Individual Migration Decisions," Econometrica, Econometric Society, vol. 79(1), pages 211-251, January.
    4. Kenneth I. Wolpin & Petra E. Todd, 2006. "Assessing the Impact of a School Subsidy Program in Mexico: Using a Social Experiment to Validate a Dynamic Behavioral Model of Child Schooling and Fertility," American Economic Review, American Economic Association, vol. 96(5), pages 1384-1417, December.
    5. Jeremy Lise & Shannon Seitz & Jeffrey Smith, 2003. "Equilibrium Policy Experiments and the Evaluation of Social Programs," Working Papers 1012, Queen's University, Department of Economics.
    6. Christopher Ferrall, 2005. "Solving Finite Mixture Models: Efficient Computation in Economics Under Serial and Parallel Execution," Computational Economics, Springer;Society for Computational Economics, vol. 25(4), pages 343-379, June.
    7. Hanming Fang & Dan Silverman, 2009. "Time-Inconsistency And Welfare Program Participation: Evidence From The Nlsy," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 50(4), pages 1043-1077, November.
    8. David Card & Philip Robins, 1996. "Do Financial Incentives Encourage Welfare Recipients to Work? Early Findings from the Canadian Self Sufficiency Project," Working Papers 738, Princeton University, Department of Economics, Industrial Relations Section..
    9. Christopher J. Flinn, 2006. "Minimum Wage Effects on Labor Market Outcomes under Search, Matching, and Endogenous Contact Rates," Econometrica, Econometric Society, vol. 74(4), pages 1013-1062, July.
    10. Michael P. Keane & Kenneth I. Wolpin, 2002. "Estimating Welfare Effects Consistent with Forward-Looking Behavior. Part II: Empirical Results," Journal of Human Resources, University of Wisconsin Press, vol. 37(3), pages 600-622.
    11. Moffitt, Robert, 1983. "An Economic Model of Welfare Stigma," American Economic Review, American Economic Association, vol. 73(5), pages 1023-1035, December.
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    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. GMM and its application outside finance
      by Chris Auld in ChrisAuld.com on 2013-10-22 00:55:38

    Citations

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    Cited by:

    1. Christopher Ferrall, 2002. "Estimation and Inference in Social Experiments," General Economics and Teaching 0209001, EconWPA.
    2. Jeremy Lise & Shannon Seitz & Jeffrey Smith, 2015. "Evaluating search and matching models using experimental data," IZA Journal of Labor Economics, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-35, December.
    3. Schorfheide, Frank & Wolpin, Kenneth I., 2016. "To hold out or not to hold out," Research in Economics, Elsevier, vol. 70(2), pages 332-345.
    4. Marc K. Chan, 2017. "Welfare Dependence and Self-Control: An Empirical Analysis," Review of Economic Studies, Oxford University Press, vol. 84(4), pages 1379-1423.
    5. Vincent Pohl, 2014. "Medicaid and the Labor Supply of Single Mothers: Implications for Health Care Reform," Upjohn Working Papers and Journal Articles 15-222, W.E. Upjohn Institute for Employment Research.
    6. Esther Duflo & Rema Hanna & Stephen P. Ryan, 2012. "Incentives Work: Getting Teachers to Come to School," American Economic Review, American Economic Association, vol. 102(4), pages 1241-1278, June.
    7. Cahuc, Pierre & Carcillo, St├ęphane & Le Barbanchon, Thomas, 2017. "The Effectiveness of Hiring Credits," IZA Discussion Papers 11248, Institute for the Study of Labor (IZA).
    8. Chan, Marc K. & Liu, Kai, 2015. "Life-Cycle and Intergenerational Effects of Child Care Reforms," IZA Discussion Papers 9377, Institute for the Study of Labor (IZA).

    More about this item

    Keywords

    Dynamic Household Behavior; Welfare Policy; Controlled Experiments; GMM;

    JEL classification:

    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • C9 - Mathematical and Quantitative Methods - - Design of Experiments
    • J0 - Labor and Demographic Economics - - General
    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling

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