The Pennsylvania Reemployment Bonus Experiments: How a survival model helps in the analysis of the data
Survival models for life-time data and other time-to-event data are widely used in many fields, including medicine, the environmental sciences, engineering etc. They have also found recognition in the analysis of economic duration data. This paper provides a reanalysis of the Pennsylvania Reemployment Bonus Experiments, which were conducted in 1988-89 to examine the effect of different types of reemployment bonus offers on the unemployment spell. A Cox-proportional-hazards survival-model is fitted to the data and the results are compared to the results of a linear regression approach and to the results of a quantile regression approach. The Cox-proportional-hazards model provides for a remarkable goodness of fit and yields less effective treatment responses, therefore lower expectations concerning the overall implications of the Pennsylvania experiment. An influence analysis is proposed for obtaining qualitative information on the influence of the covariates at different quantiles. The results of the quantile regression and of the influence analysis show that both the linear regression and the Cox-model still impose stringent restrictions on the way covariates influence the duration distribution, however, due to its flexibility, the Cox-proportional hazards model is more appropriate for analysing the data.
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- Bruce D. Meyer, 1995. "Lessons from the U.S. Unemployment Insurance Experiments," Journal of Economic Literature, American Economic Association, vol. 33(1), pages 91-131, March.
- Yannis Bilias & Roger Koenker, 2001. "Quantile regression for duration data: A reappraisal of the Pennsylvania Reemployment Bonus Experiments," Empirical Economics, Springer, vol. 26(1), pages 199-220.
- Woodbury, Stephen A & Spiegelman, Robert G, 1987.
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American Economic Review,
American Economic Association, vol. 77(4), pages 513-530, September.
- Stephen A. Woodbury & Robert G. Spiegelman, . "Bonuses to Workers and Employers to Reduce unemployment: Randomized Trials in Illinois," Upjohn Working Papers and Journal Articles sawrgs1987, W.E. Upjohn Institute for Employment Research.
- Meyer, Bruce D, 1996. "What Have We Learned from the Illinois Reemployment Bonus Experiment?," Journal of Labor Economics, University of Chicago Press, vol. 14(1), pages 26-51, January.
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