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Experiments and Natural Experiments

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Unformatted text preview: an the control group, while in the other the pattern is reversed, although in neither case is the difference significant.Mean wages are also very similarin the programand control groups.This may seem a little surprisinggiven the extra work effort by the program group over the previous 51 months. Indeed, as shown in the table, we estimate that programgroup members worked a total of 0.28 years more than control group members between randomassignmentand month 52. Recall, however,that the sample had about 7 years of work experience at random assignment.Evidence on the returnsto experiencefor less skilledfemale workerssuggeststhe marginalimpact of 0.2-0.3 years of work experience for such a group is small-on the order of 1-2% (Gladden and Taber(2000))-and probablyundetectable. The bottom panel of Table III presents results from a series of regression models that evaluate the impactsof being in the SSP programgroup on wages and cumulativework experience in the 52nd month of the experiment.These models are fitted to the subsamples of control and programgroup members with wage data in month 52, and include time dummies, province dummies (in the models that pool the two provinces), and a set of covariatesthat repreA characteristics. possible concernwith the modsent pre-random-assignment els is selectivity bias, since the sample is conditioned on reporting a wage in month 52. However, given equalityin the fractionsof the programand control of groupswith a wage, and the similarcharacteristics the employed subgroups, a conventionalcontrol function for selectivitybias would have the same mean Fortin – Econ 560 Lecture 1C SSP effects Because of more careful randomization, the comparison between T and C provides more useful results in this case, but the program effects are still estimated within a D-D framework with controls because of differences between T and C in work experience and education upgrading. The effects on full-time employment and reduced welfare participation, although quite spectacular during the program, faded away after the end of the program. o At peak, SSP generated a 14 percentage point reduction in welfare participation. Given the requirements of the program of maintaining FT employment, there was a clearer positive impact on accumulated labor market experience In terms of wage growth, it turns out that the program requirement of maintaining full-time employment had some unintended consequences o In the short run, it forced some program participants to accept lower wages to get full-time employment (rather than part-time) (Zabel et al, 2004) Fortin – Econ 560 Lecture 1C o There is evidence of a relative wage progression of approximately 10 percentage points for the program participants who would not have found full-time employment in the first year without such an incentive. o In the longer run, it prevented some program participants to upgrade their education yielding less wage growth than among the control group (Riddell and Riddell, 2006) In terms of the cos...
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