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DiD_handout - ECON 1002 PART B Answer any TWO questions B1...

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ECON 1002 /TURN OVER ECON 1002 Page 3 PART B: Answer any TWO questions B1) Recent years have seen a fall in labour market participation of older workers. The following data are descriptive statistics from two random samples of individuals aged 50 to 64 in England. 50-59 60-64 All 50-64 1985 Working 3188 1011 4199 Not working 2310 1288 3598 All 5498 2299 7797 2001 Working 2917 812 3729 Not working 1980 1304 3284 All 4897 2116 7013 a) For each year, compute a simple estimate of the effect of reaching age 60-64 on whether an individual is employed. b) State the conditions under which you could interpret your answers to part (a) as causal effects. c) Do you think these conditions are likely to hold in this case? Would you consider the estimates in part (a) to be evidence that this ‘effect’ has changed over time? Suppose, the government believes there is a true decline and in 2002 introduces a new policy targeted at increasing employment amongst 60-64 year olds, by a combination of retraining programmes and wage subsidies. In order to evaluate the reform they estimate the following simple model using a pooled cross-sectional sample of individuals aged 50 to 64 (collected over the period 2000 to 2005): hours i = α + β D6064 i + θ YEAR2003 i + δ (YEAR2003 i *D6064 i ) + e i where hours i is the hours worked in the paid labour market
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This note was uploaded on 03/03/2010 for the course ECON 1002 taught by Professor Matthewwakefield during the Spring '09 term at UCL.

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DiD_handout - ECON 1002 PART B Answer any TWO questions B1...

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