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Experiments and Natural Experiments

O because the authors select men without dependent

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Unformatted text preview: ounds 0.45 24 25 26 27 28 29 30 31 32 33 34 Age (Census day) 35 36 37 38 39 40 Fig. 4. Employment rate in previous year, Quebec 1986. Table 1 Regression discontinuity estimates of the effect of higher social assistance benefits on labour supply in Quebec, 1986 Specification for age Empl. rate last year Empl. rate at Census Difference in empl. rate Weekly hours Mean of the dependent variable 0.562 Regression discontinuity estimates Linear À0.045*** (0.012) Quadratic À0.048*** (0.013) Cubic À0.043** (0.018) Linear spline À0.047*** (0.013) Quadratic spline À0.038 (0.024) Goodness of fit statistic (p-value) Linear 0.48 Linear spline 0.47 0.618 0.056 À0.041*** (0.012) À0.051*** (0.012) À0.048*** (0.014) À0.049*** (0.011) À0.056** (0.018) À0.029** (0.011) À0.031** (0.012) À0.030** (0.013) À0.032** (0.013) À0.035* (0.016) À1.45** (0.54) À1.75** (0.61) À1.47* (0.70) À1.72*** (0.55) À1.66 (0.94) 0.91 0.85 0.48 0.55 0.52 0.72 24.39 Note: *** Indicate statistical significance at the 1% level. ** For the 5% level. * For the 10% level. One nice feature of the results is that the two employment rate measures yield remarkably similar estimates that range from À0:038 to À0:056. This suggests that the RD approach is appropriate for the models of previous year outcomes despite some of the data shortcomings discussed in Section 4. Note also that the goodness-of-fit tests suggest that even the simpler models (linear or linear spline) fit the data very well. Fortin – Econ 560 Lecture 1C The authors also take advantage of two records of the employment rate, one in the week of the Census ERCia and another in the previous year ERL'ia to estimate a FDRD, under the assumption that 1 = 1 ' ERC ia ERL 'ia ( 0 0 ' ) 1 (Treat ia Treat 'ia ) ( age ) ( ia 'ia ), that eliminates individual fixed effects. The cancellation of the lower benefit policy in 1989 makes a pre- and post-1989 comparison natural, and the comparison with the rest of in Canada gives the authors the opportunity to compare the results from the regression discontinuity estimator to results from more traditional difference-in-difference estimators. They find that without a control group placed in the same labour market as the treatment group, the difference-in-difference estimates can diverge greatly from the regression discontinuity estimates....
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