Policy discontinuity and duration outcomes

Gerard J. van den Berg, Antoine Bozio, Mónica Costa Dias*

*Corresponding author for this work

Research output: Contribution to JournalArticleAcademicpeer-review

Abstract

Causal effects of a policy change on hazard rates of a duration outcome variable are not identified from a comparison of spells before and after the policy change if there is unobserved heterogeneity in the effects and no model structure is imposed. We develop a discontinuity approach that overcomes this by considering spells that include the moment of the policy change and by exploiting variation in the moment at which different cohorts are exposed to the policy change. We prove identification of average treatment effects on hazard rates without model structure. We estimate these effects by kernel hazard regression. We use the introduction of the NDYP program for young unemployed individuals in the UK to estimate average program participation effects on the exit rate to work as well as anticipation effects.

Original languageEnglish
Pages (from-to)871-916
Number of pages46
JournalQuantitative Economics
Volume11
Issue number3
DOIs
Publication statusPublished - 1 Jul 2020

Keywords

  • average treatment effect
  • C14
  • C25
  • causality
  • hazard rate
  • identification
  • J64
  • job search assistance
  • kernel hazard estimation
  • local linear regression
  • Policy evaluation
  • regression discontinuity
  • selectivity
  • youth unemployment

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