Equilibrium Policy Experiments and the Evaluation of Social Programs

By Jeremy Lise, S. Seitz, Jeffrey A. Smith. Social Science Research Network, 2003

171 citations recorded by the source corpus.

This paper makes three primary contributions. First, we demonstrate the usefulness of general equilibrium models as tools with which to draw policy implications for policies implemented in practice only as small-scale social experiments. Second, we illustrate the usefulness of social experiments as a tool to evaluate equilibrium models. In particular, we calibrate our model using only data on an experimental control group and from general data sets, and then use it to predict (in partial equilibrium) the outcomes experienced by an experimental treatment group. We find that it predicts these outcomes remarkably well. Third, we apply our methodology to the evaluation of the Canadian Self-Sufficiency Project (SSP), a policy providing generous financial incentives for Income Assistance (IA) recipients to obtain stable employment. This policy is similar to many other policies designed to 'make work pay' currently under debate or in place in the US, the UK and elsewhere. Our results reveal several important feedback effects associated with the SSP policy; taken together, these feedback effects reverse the cost-benefit conclusions implied by the partial equilibrium experimental evaluation.

Subfields: Economics and Econometrics, Gender Studies, Statistics and Probability

View Paper: https://www.semanticscholar.org/paper/c7e79af8009e356e015d4ef635f1dcc7dd5978e5

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Citations in the corpus

Do Labor Market Policies have Displacement Effects? Evidence from a Clustered Randomized Experiment* (2013, background): “…find that, in France, the impact of a training program for young unemployed workers diminishes with 4See Johnson (1979), Atkinson (1987), Meyer (1995), Davidson and Woodbury (1993), Lise, Seitz, and Smith (2004), Van der Linden (2005), Cahuc and Le Barbanchon (2010) for previous work on the topic.”
The price effects of cash versus in-kind transfers (2011, unknown): “…programs, but fewer studies examine the indirect effects of programs and in particular their market-level effects that operate through prices (Lise, Seitz, and Smith, 2004; Angelucci and De Giorgi, 2009; Kaboski and Townsend, 2011; Imbert and Papp, 2012; Attanasio, Meghir, and Santiago,…”
The Structural Estimation of Behavioral Models: Discrete Choice Dynamic Programming Methods and Applications (2011, methodology): “For this reason, researchers will attach di¤erent priors to a model s credibility, di¤erent weights to the validation evidence, and may, therefore, come 163Similarly, Lise, Seitz and Smith (2003) used data from a Canadian experiment designed to move people o¤ of welfare and into work to validate a c”