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Estimating Equilibrium Effects of Job Search Assistance

Author

Listed:
  • Pieter Gautier

    (VU University Amsterdam)

  • Paul Muller

    (VU University Amsterdam)

  • Bas van der Klaauw

    (VU University Amsterdam, and CEPR)

  • Michael Rosholm

    (Aarhus University)

  • Michael Svarer

    (Aarhus University)

Abstract

Randomized experiments provide policy relevant treatment effects if there are no spillovers between participants and nonparticipants. We show that this assumption is violated for a Danish activation program for unemployed workers.Using a difference-in-difference model we show that the nonparticipants in the experiment regions find jobs slower after the introduction of the activation program (relative to workers in other regions). We then estimate anequilibrium search model. This model shows that a large scale role out of the activation program decreases welfare, while a standard partial microeconometric cost-benefit analysis would conclude the opposite.

Suggested Citation

  • Pieter Gautier & Paul Muller & Bas van der Klaauw & Michael Rosholm & Michael Svarer, 2012. "Estimating Equilibrium Effects of Job Search Assistance," Tinbergen Institute Discussion Papers 12-071/3, Tinbergen Institute.
  • Handle: RePEc:tin:wpaper:20120071
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    More about this item

    Keywords

    randomized experiment; policy-relevant treatment effects; job search;

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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