Long-term effects of a mandatory multistage program: the New Deal for young people in the UK

Giacomo De Giorgi

No W05/08, IFS Working Papers from Institute for Fiscal Studies

Abstract: The New Deal For Young People is the major welfare-to-work program in the UK. It is a mandatory multistage policy targeted at the 18-24 year old unemployed. This paper investigates the effectiveness of the program in terms of enhancing the (re)employment probability of participant males. I exploit the eligibility rule to identify a suitable counterfactual relying upon a simple regression discontinuity design. By exploiting such a discontinuity I am able to non parametrically identify (Hahn et al., 2001) a local average treatment effect (LATE). While relying upon the non parametric local linear regression method I am able to push forward such a parameter to a "global" dimension, implicitly adding parametric structure. No evidence of possible general equilibrium as well as substitution effects is found by a co- hort specific approach (before and after the program). The main result is that the program enhances employability by about 6-7%.

Keywords: Labour market policy evaluation; regression discontinuity; non parametric (search for similar items in EconPapers)
JEL-codes: C14 J18 J23 J38 (search for similar items in EconPapers)
Pages: 29 pp.
Date: 2005-04-13
New Economics Papers: this item is included in nep-eec
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Citations: View citations in EconPapers (39)

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