Some Practical Issues in the Evaluation of Heterogeneous Labour Market Programmes by Matching Methods

TLDR

Several studies have applied a recent matching estimator for multiple programmes to analyse active labour market policies. This paper examines the estimator’s sensitivity to practical issues in evaluating heterogeneous labour market programmes. The estimator proves robust to various implementation features, yet its effectiveness hinges on data quality, and a bootstrap comparison supports using a simplified, non‑sequential approximation of its distribution.

Abstract

Summary Recently several studies have analysed active labour market policies by using a recently proposed matching estimator for multiple programmes. Since there is only very limited practical experience with this estimator, this paper checks its sensitivity with respect to issues that are of practical importance in this kind of evaluation study. The estimator turns out to be fairly robust to several features that concern its implementation. Furthermore, the paper demonstrates that the matching approach per se is no panacea for solving all the problems of evaluation studies, but that its success depends critically on the information that is available in the data. Finally, a comparison with a bootstrap distribution provides some justification for using a simplified approximation of the distribution of the estimator that ignores its sequential nature.