Regional treatment intensity as an instrument for the evaluation of labour market policies

Markus Frölich () and Michael Lechner

University of St. Gallen Department of Economics working paper series 2004 from Department of Economics, University of St. Gallen

Abstract: The effects of active labour market policies (ALMP) on individual employment chances and earnings are evaluated by nonparametric instrumental variables based on Swiss administrative data with detailed re-gional information. Using an exogenous variation in the participation probabilities across fairly autonomous regional units (cantons) generated by the federal government, we identify the effects of ALMP by comparing individuals living in the same local labour market but in different cantons. Taking account of small sample problems occurring in IV estimation, our results suggest that ALMP increases individual employment probabilities by about 15% in the short term for a weighted subpopulation of compliers.

Keywords: Local average treatment effect; active labour market policy; state borders; geographic variation; weak instruments; small sample problems of IV; Switzerland; Fuller estimator (search for similar items in EconPapers)
JEL-codes: C14 J68 (search for similar items in EconPapers)
Pages: 67 pages
Date: 2004-08
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Citations: View citations in EconPapers (4)

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Related works:
Working Paper: Regional Treatment Intensity as an Instrument for the Evaluation of Labour Market Policies (2004)
Working Paper: Regional Treatment Intensity as an Instrument for the Evaluation of Labour Market Policies (2004)
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