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The matching method for treatment evaluation with selective participation and ineligibles

Authors: Monica Costa Dias , Hidehiko Ichimura and Gerard Van Den Berg
Date: 29 November 2010
Type: cemmap Working Paper, CWP35/10
DOI: 10.1920/wp.cem.2010.3510

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. Within the same framework we also suggest a new test of the conditional independence assumption justifying matching. Policies with eligibility restrictions, where treatment is impossible if some variable exceeds a certain value, provide a natural application. In an empirical analysis, 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 making of subsidized work detrimental in moving individuals into employment.

This paper is a revised version of cemmap working paper CWP33/07.

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Now published:
Monica Costa Dias, Hidehiko Ichimura and Gerard Van Den Berg January 2013, Treatment Evaluation with Selective Participation and Ineligibles, Journal Article, Taylor & Francis
Previous version:
Monica Costa Dias, Hidehiko Ichimura and Gerard Van Den Berg December 2007, The matching method for treatment evaluation with selective participation and ineligibles, cemmap Working Paper, CWP33/07, The IFS

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