{"title":"AGE DISCONTINUITY AND NONEMPLOYMENT BENEFIT POLICY EVALUATION THROUGH THE LENS OF JOB SEARCH THEORY","authors":"Bruno Decreuse, Guillaume Wilemme","doi":"10.1111/iere.12726","DOIUrl":null,"url":null,"abstract":"Recent papers use regression discontinuity designs (RDDs) based on age discontinuity to evaluate social assistance (SA) and unemployment insurance (UI) extension policies. Job search theory predicts that such designs generate biased estimates of the policy‐relevant treatment effect. Owing to market frictions, people below the age threshold modify their search behavior in expectation of future eligibility. We use a job search model to quantify the biases on various datasets in the literature. The impacts of SA benefits on employment are underestimated, whereas those of UI extensions on nonemployment duration are overestimated. The article provides insights for RDD evaluations of age‐discontinuous policies.","PeriodicalId":48302,"journal":{"name":"International Economic Review","volume":"8 1","pages":""},"PeriodicalIF":1.5000,"publicationDate":"2024-08-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"International Economic Review","FirstCategoryId":"96","ListUrlMain":"https://doi.org/10.1111/iere.12726","RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 0
Abstract
Recent papers use regression discontinuity designs (RDDs) based on age discontinuity to evaluate social assistance (SA) and unemployment insurance (UI) extension policies. Job search theory predicts that such designs generate biased estimates of the policy‐relevant treatment effect. Owing to market frictions, people below the age threshold modify their search behavior in expectation of future eligibility. We use a job search model to quantify the biases on various datasets in the literature. The impacts of SA benefits on employment are underestimated, whereas those of UI extensions on nonemployment duration are overestimated. The article provides insights for RDD evaluations of age‐discontinuous policies.
期刊介绍:
The International Economic Review was established in 1960 to provide a forum for modern quantitative economics. From its inception, the journal has tried to stimulate economic research around the world by publishing cutting edge papers in many areas of economics, including econometrics, economic theory, macro, and applied economics.