Do Labor Market Policies have Displacement Effects? Evidence from a Clustered Randomized Experiment*

By Bruno Crépon, Esther Duflo, Marc Gurgand, Roland Rathelot, Philippe Zamora. 2013

619 citations recorded by the source corpus.

This paper reports the results from a randomized experiment designed to evaluate the direct and indirect (displacement) impacts of job placement assistance on the labor market outcomes of young, educated job seekers in France. We use a two-step design. In the first step, the proportions of job seekers to be assigned to treatment (0%, 25%, 50%, 75% or 100%) were randomly drawn for each of the 235 labor markets (e.g. cities) participating in the experiment. Then, in each labor market, eligible job seekers were randomly assigned to the treatment, following this proportion. After eight months, eligible, unemployed youths who were assigned to the program were significantly more likely to have found a stable job than those who were not. But these gains are transitory, and they appear to have come partly at the expense of eligible workers who did not benefit from the program, particularly in labor markets where they compete mainly with other educated workers, and in weak labor markets. Overall, the program seems to have had very little net benefits.

Subfields: Economics and Econometrics, General Health Professions, Statistics and Probability

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Citations in the corpus

From Proof of Concept to Scalable Policies: Challenges and Solutions, with an Application (2017, neutral): “In practice, the Crepon et al. (2013) study lacks enough statistical precision to identify differential spillover effects (despite working at the scale of half of France). Banerjee, Duflo and Keniston (2014) find a nonlinearity in overall effect of the treatment (there is no impact in treating 25 pe”
Duration Dependence and Labor Market Conditions: Evidence from a Field Experiment* (2013, background): “Crépon et al. (2013) conduct a clustered randomized control trial of job placement assistance and find that the negative spillover effects of”
Mismatch Unemployment and the Geography of Job Search (2018, neutral): “…et al., 2013a,b), the equilibrium e ects of active labor market policies (Davidson and Woodbury, 1993; Blundell et al., 2004; Gautier et al., 2012; Crépon et al., 2013; Ferracci et al., 2014), the heterogeneity of the negative duration dependence with local conditions (Kroft et al., 2013), or…”
Active Labor Market Policies (2016, positive): “Crépon et al. (2013) present an original study based on a randomized controlled trial using double randomization.”
Microcredit Impacts: Evidence from a Randomized Microcredit Program Placement Experiment by Compartamos Banco (2014, positive): “This is a common assumption in the microcredit literature that we plan to test in future work, employing a similar strategy as Crépon et al. (2013).”
Private and Public Provision of Counseling to Job-Seekers: Evidence from a Large Controlled Experiment (2014, background): “Crépon et al. (2013) show that displacement effects can make such estimations an upper bound of the true impact of such policy in equilibrium.”
Location, search costs and youth unemployment: experimental evidence from transport subsidies (2018, positive): “This paper cannot show that improvements in labour outcomes for individuals in the study did not displace other workers (Crepon et al, 2013).”
Interventions to Improve the Labour Market Outcomes of Youth: A Systematic Review of Training, Entrepreneurship Promotion, Employment Services and Subsidized Employment Interventions (2017, methodology): “In France, participation in the workfare programme carried a stigma that hindered participants in their transition to better and more durable jobs (Bonnal, Fougere & Sérandon, 1997; Brodaty, Crépon & Fougère, 2000).”
Decision Theoretic Approaches to Experiment Design and External Validity (2016, background): “Experimental designs that at least partially capture local externalities are now quite standard (Baird et al., 2014; Crépon et al., 2013; Muralidharan and Sundararaman, 2015).”
The Effect of Unemployment Benefits and Nonemployment Durations on Wages (2016, background): “Macroeconomic elasticities that also take into account general equilibrium effects can only be directly identified using variation in policies on the level of the labor market (such as in Lalive et al. (2013) or Crépon et al. (2013)) .”