Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/33435
Authors: 
Lise, Jeremy
Seitz, Shannon
Smith, Jeffrey A.
Year of Publication: 
2005
Series/Report no.: 
IZA Discussion Papers 1717
Abstract: 
This paper introduces an innovative test of search and matching models using the exogenous variation available in experimental data. We take an off-the-shelf Pissarides matching model and calibrate it to data on the control group from a randomized social experiment. We then simulate a program group from a randomized experiment within the model. As a measure of the performance of the model, we compare the outcomes of the program groups from the model and from the randomized experiment. We illustrate our methodology using the Canadian Self-Sufficiency Project (SSP), a social experiment providing a time limited earnings supplement for Income Assistance recipients who obtain full time employment within a 12 month period. We find two features of the model are consistent with the experimental results: endogenous search intensity and exogenous job destruction. We find mixed evidence in support of the assumption of fixed hours of labor supply. Finally, we find a constant job destruction rate is not consistent with the experimental data in this context.
Subjects: 
calibration
equilibrium search and matching models
policy experiments
Self-Sufficiency Project
welfare
social experiments
JEL: 
J2
I38
J6
Document Type: 
Working Paper

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