The Matching Method for Treatment Evaluation with Selective Participation and Ineligibles

36 Pages Posted: 23 May 2008

See all articles by Monica Costa Dias

Monica Costa Dias

Institute for Fiscal Studies (IFS)

Hidehiko Ichimura

Graduate School of Economics, University of Tokyo

Gerard J. van den Berg

VU University Amsterdam - Department of Economics; Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics; Tinbergen Institute

Abstract

The matching method for treatment evaluation does not balance selective unobserved differences between treated and non-treated. We derive a simple correction term if there is an instrument that shifts the treatment probability to zero in specific cases. Policies with eligibility restrictions, where treatment is impossible if some variable exceeds a certain value, provide a natural application. In an empirical analysis, we first examine the performance of matching versus regression-discontinuity estimation in the sharp age-discontinuity design of the NDYP job search assistance program for young unemployed in the UK. Next, we exploit the age eligibility restriction in the Swedish Youth Practice subsidized work program for young unemployed, where compliance is imperfect among the young. Adjusting the matching estimator for selectivity changes the results towards ineffectiveness of subsidized work in moving individuals into employment.

Keywords: job search assistance, selection, regression discontinuity, treatment effect, policy evaluation, propensity score, subsidized work, youth unemployment

JEL Classification: C21, C14, C31, J64

Suggested Citation

Costa Dias, Monica and Ichimura, Hidehiko and van den Berg, Gerard J., The Matching Method for Treatment Evaluation with Selective Participation and Ineligibles. , Vol. , pp. -, . Available at SSRN: https://ssrn.com/abstract=1136442 or http://dx.doi.org/10.1111/j.0042-7092.2007.00700.x

Monica Costa Dias (Contact Author)

Institute for Fiscal Studies (IFS) ( email )

7 Ridgmount Street
London, WC1E 7AE
United Kingdom

Hidehiko Ichimura

Graduate School of Economics, University of Tokyo ( email )

7-3-1 Hongo Bunkyo-ku
Tokyo 113-0033
Japan

Gerard J. Van den Berg

VU University Amsterdam - Department of Economics ( email )

De Boelelaan 1105
1081 HV Amsterdam
Netherlands
+31 20 444 6132 (Phone)
+32 20 444 6020 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Tinbergen Institute

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

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