Treatment Evaluation in the Case of Interactions within Markets

Marc Ferracci, Gregory Jolivet and Gerard van den Berg

No 4700, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We extend the standard evaluation framework to allow for interactions between individuals within segmented markets. An individual's outcome depends not only on the assigned treatment status but also on (features of) the distribution of the assigned treatments in his market. To evaluate how the distribution of treatments within a market causally affects the average effect within the market, averaged over the full population, we develop an identification and estimation method in two steps. The first one focuses on the distribution of the treatment within markets and between individuals and the second step addresses the distribution of the treatment between markets. We apply our method to data on training programs for unemployed workers in France. We use a rich administrative register of unemployment and training spells as well as the information on local labor demand that is used by unemployment agencies to allocate training programs. The results show that the average treatment effect on the employment rate causally decreases with respect to the proportion treated in the market. Our analysis accounts for unobserved heterogeneity between markets (using the longitudinal dimension of the data) and, in a robustness check, between individuals.

Keywords: matching estimators; equilibrium effects; treatment evaluation (search for similar items in EconPapers)
JEL-codes: C13 C14 C21 C31 J64 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2010-01
New Economics Papers: this item is included in nep-ecm and nep-lab
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Citations: View citations in EconPapers (32)

Published - published as 'Evidence of Treatment Spillovers within Markets', 2014, 96 (5), 812 - 823

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Working Paper: Treatment evaluation in the case of interactions within markets (2010)
Working Paper: Treatment Evaluation in the Case of Interaction Within Markets (2009)
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