Scandinavian Working Papers in Economics

Working Paper Series,
IFAU - Institute for Evaluation of Labour Market and Education Policy

No 2015:5: Evaluation of sequences of treatments with application to active labor market policies

Johan Vikström ()
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Johan Vikström: IFAU - Institute for Evaluation of Labour Market and Education Policy, Postal: P O Box 513, SE-751 20 Uppsala, Sweden

Abstract: This paper proposes a new framework for analyzing the effects of sequences of treatments with duration outcomes. Applications include sequences of active labor market policies assigned at specific unemployment durations and sequences of medical treatments. We consider evaluation under unconfoundedness and propose conditions under which the survival time under a specific treatment regime can be identified. We introduce inverse probability weighting estimators for various average effects. The finite sample properties of the estimators are investigated in a simulation study. The new estimator is applied to Swedish data on participants in training, in a work practice program and in subsidized employment. One result is that enrolling an unemployed person twice in the same program or in two different programs one after the other leads to longer unemployment spells compared to only participating in a single program once.

Keywords: Treatment effects; dynamic treatment assignment; dynamic selection; program evaluation; work practice; training; subsidized employment

JEL-codes: C14; C40

47 pages, March 16, 2015

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