do labor market policies have displacement effects evidence from a clustered randomized experiment this article 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

the pitfalls of work requirements in welfare to work policies experimental evidence on human capital accumulation in the self sufficiency project abstract this paper investigates whether policies that encourage recipients to exit welfare for full time employment influence participation in educational activity the self sufficiency project ssp was a demonstration project where long term welfare recipients randomly assigned to the treatment group were offered a generous earnings supplement if they exited welfare for full time employment we find that treatment group members were less likely to upgrade their education along all dimensions high school completion enrolling in a community college or trade school and enrolling in university thus work first policies that encourage full time employment may reduce educational activity and may have adverse consequences on the long run earnings capacity of welfare recipients we also find that there was a substantial amount of educational upgrading in this population for instance among high school dropouts at the baseline 19 completed their diploma by the end of the demonstration finally we simulate the consequences of the earnings supplement in the absence of adverse effects on educational upgrading doing so alters the interpretation of the lessons from the ssp demonstration

indirect effects of an aid program how do cash transfers affect ineligibles consumption cash transfers to eligible households indirectly increase the consumption of ineligible households living in the same villages this effect operates through insurance and credit markets ineligible households benefit from the transfers by receiving more gifts and loans and by reducing their savings thus the transfers benefit the local economy at large looking only at the effect on the treated underestimates the impact one should analyze the effects of this class of programs on the entire local economy rather than on the treated only and use a village level randomization rather than selecting treatment and control subjects from the same community

rationalization of market demand on finite domains the hypothesis that individuals behave as utility maximizers is the basis of the microeconomic theory of demand this hypothesis however is not observable and therefore its content and strength have to be evaluated through its implications for the properties of demand functions the implications for the properties of individual demand functions have been well known for some time but it is only recently that substantial work on the features of aggregate behavior has been undertaken in 1972 sonnenschein 6 conjectured that walras law homogeneity of degree zero in prices and boundedness from below characterize market excess demand functions i e functions defined on a set of normalized price vectors a succession of papers by sonnenschein 7 mantel 4 debreu 11 and mc fadden et al 3 established such a result in a variety of precise formulations after these conributions it could be said that the structure of excess demand functions was well understood an analogous problem concerning the decomposition of market demand functions i e functions defined on a set of price income vectors was also posed by sonnenschein 8 by means of a simple example he showed that when the income distribution is constant it is not possible in general to decompose functions that satisfy the balance and zero homogeneity conditions if we require postivity of individual demands he also conjectured that abstracting from restrictions which follow from the positivity of individual demand any function satisfying the two previously mentioned conditions can be decomposed into a finite number of individual demand functions derived from utility maximization and sharing market income in some fixed proportion a proof of the conjecture for the case of two commodities was also provided

micro data heterogeneity and the evaluation of public policy nobel lecture this paper summarizes the contributions of microeconometrics to economic knowledge four main themes are developed 1 microeconometricians developed new tools to respond to econometric problems raised by the analysis of the new sources of micro data produced after the second world war 2 microeconometrics improved on aggregate time series methods by building models that linked economic models for individuals to data on individual behavior 3 an important empirical regularity detected by the field is the diversity and heterogeneity of behavior this heterogeneity has profound consequences for economic theory and for econometric practice 4 microeconometrics has contributed substantially to the scientific evaluation of public policy

the estimation of wage gains and welfare gains in self selection models the authors modify the basic self sele ction model for the effects ofeducation training unions and other activities on wages by including heterogeneity of rewards to the activity i e diffe rences across individuals in the rate of return to the activity the authors sho w that such heterogeneity creates a new form of selectionbias they provide tes ts for its presence and draw out its implications for the wage and welfare gains to the activity an empirical application provides strong support for such hete rogeneityin one particular training program copyright 1987 by mit press

quality and quantity in primary care mixed payment models evidence from family health organizations in ontario abstract we study the impact of a mixed capitation model the family health organization fho on quality and quantity outcomes among primary care physicians in ontario using a panel of administrative data covering one year before and two years after the fho model was introduced we find that physicians in the fho model provide about 6 to 7 fewer services and visits per day but are between 7 and 11 more likely to achieve preventive care quality targets these results suggest that the mixed capitation model with contractible quality indicators may be welfare improving relative to the ffs model

the social experiment market social experiments are field studies of social programs in which individuals households or in rare instances firms or organizations are randomly assigned to two or more alternative policy interventions or treatments treatments tested by social experiments have included negative income taxes low income housing assistance co insurance rates re employment bonuses welfare to work initiatives job training time of day electric rates and case management models of human service delivery the results of such experiments not only supply the public with policy relevant information but also provide employment and insight to economists this article examines the social experiments market and the characteristics of the rather complex product exchanged in this market we investigate the social experiment industry with data extracted from the digest of social experiments greenberg and shroder 1997 augmented by interviews with buyers and sellers in the market to qualify for a 2 3 page entry in the digest the human subjects had to be randomly assigned among the treatments each of which could involve different incentives opportunities or constraints data were then collected on market and or fiscal outcomes and subjected to professional evaluation the definition of experiment used for the digest and this article is deliberately narrow we do not cover the numerous evaluations of social programs

efficiency heterogeneity and cost function analysis empirical evidence from pathology services in the national health service in england pathology services are increasingly recognized as key to effective healthcare delivery underpinning diagnosis long term disease management and research to the extent that pathology services affect a patient s treatment pathway significant healthcare costs are influenced directly by the performance of these services given pressures on the uk department of health to make efficiency savings and that little is known about the efficiency of pathology laboratories this area offers unlocked potential for efficiency gains we adopt a time varying inefficiency model with laboratory specific time paths for inefficiency to identify potential savings in pathology services based on a panel of 57 english laboratories over a 5 year period we apply a range of approaches to account for observable and unobservable heterogeneity between laboratories we find potential efficiency savings of 13 in pathology services in this sample which implies the potential for an annual saving of 390m in pathology across the nh

productivity in public services abstract this paper discusses issues arising in the measurement of productivity in public services compared to measuring productivity in the private sector difficulties arise because the output of public services is often unpriced and because some public services are consumed collectively a key problem is measuring the full range of outputs and quality improvements delivered by public sector organizations that are valued by society without comprehensive measures of output productivity statistics may be misleading i outline methods used in the measurement of both private and public sector productivity and discuss the measurement of public sector productivity in practice finally i discuss studies that examine factors underlying productivity differences and productivity growth in public and private sector organizations public sector reforms and the use of pilot schemes in public sector organizations present opportunities for research to identify causal effects on productivity

instruments randomization and learning about development there is currently much debate about the effectiveness of foreign aid and about what kind of projects can engender economic development there is skepticism about the ability of econometric analysis to resolve these issues or of development agencies to learn from their own experience in response there is increasing use in development economics of randomized controlled trials rcts to accumulate credible knowledge of what works without overreliance on questionable theory or statistical methods when rcts are not possible the proponents of these methods advocate quasirandomization through instrumental variable iv techniques or natural experiments i argue that many of these applications are unlikely to recover quantities that are useful for policy or understanding two key issues are the misunderstanding of exogeneity and the handling of heterogeneity i illustrate from the literature on aid and growth actual randomization faces similar problems as does quasi randomization notwithstanding rhetoric to the contrary i argue that experiments have no special ability to produce more credible knowledge than other methods and that actual experiments are frequently subject to practical problems that undermine any claims to statistical or epistemic superiority i illustrate using prominent experiments in development and elsewhere as with iv methods rct based evaluation of projects without guidance from an understanding of underlying mechanisms is unlikely to lead to scientific progress in the understanding of economic development i welcome recent trends in development experimentation away from the evaluation of projects and toward the evaluation of theoretical mechanisms jel c21 f35 o19

uniqueness of equilibrium in the classical capital asset pricing model general equilibrium in the classical two period mean variance capital asset pricing model is not unique corresponding to one single set of expectations utility functions and an initial wealth distribution there may be several equilibria and an asset may have different prices expected rates of return and betas in different equilibria however any equilib rium portfolio is sustained by a unique price system and if investors have decreasing risk aversion then any equilibrium allocation ofthe risky assets is sustained by a unique price system tion of the market portfolio of risky assets the other is the simple linear pricing relation expressed in terms of betas and rates of return by sharpe 1964 and in terms of prices by lintner 1965 these properties of equilibrium imply severe restrictions on the possible equilibrium portfolios and equilibrium asset prices and they have led to a presumption that the equilibrium in this model is unique see e g sharpe 1970 relying on mossin s 1966 interpretation ofthe model this paper shows that general equilibrium in the classical capm is not necessar ily unique there may be several equilibria even with the same expected total returns covariances utility functions and initial distribution ofthe assets an asset may have different prices expected rates of return and betas in different equilibria however if just one investor s equilibrium holdings of both the risk less and the risky assets are given then the price system is unique if investors have decreasing risk aversion then the price system is unique given the equilib rium allocation of the risky assets on the other hand if investors do not have decreasing risk aversion then an allocation of risky assets may be sustained by several different price systems

viewpoint estimating the causal effects of policies and programs estimation inference and interpretation of the causal effects of programs and policies have all advanced dramatically over the past 25 years we highlight three particularly important intellectual trends an improved appreciation of the substantive importance of heterogeneous responses and of their methodological implications a stronger focus on internal validity brought about by the credibility revolution and the scientific value that follows from grounding estimation and interpretation in economic theory we discuss a menu of commonly employed partial equilibrium approaches to the identification of causal effects emphasizing that the researcher s central intellectual contribution always consists of making an explicit case for a specific causal interpretation given the relevant economic theory the data the institutional context and the economic question of interest we also touch on the importance of general equilibrium effects and full cost benefit analyses

incentives for motivated agents under an administrative constraint consider an agent who has an expertise in producing a non marketable good this good is valued by a single principal and there is a verifiable measure of the agent s performance crucially the agent is intrinsically motivated due to warm glow altruism in addition the agent s budget which is controlled by the principal must not be less than the monetary performance cost faced by the agent this gives rise to a limited liability constraint it also restricts the agent s ability to under report costs in such environment we determine the link between the agent s budget and performance our results come in contrast to the received solution of the principal agent problem and to most in the literature on mission motivated organisations and public services provision

economic response to a guaranteed annual income experience from canada and the united states this article reviews research from the five income maintenance experiments in canada and the united states after sketching the historical and political context of the experiments we compare their designs and discuss some important analytic difficulties our primary focus is the work incentive issue both nonstructural estimates of the experimental effects and elasticity estimates of structural labor supply functions we provide initial estimates of nonstructural and structural models for the canadian experiment we discuss more briefly some non work response findings associated with a guaranteed annual income and offer some personal comments on social experimentation and the policy process

excess demand functions and incomplete markets abstract this paper is aimed at characterizing excess demand functions around noncritical spot price systems in two period exchange economies with incomplete markets and real assets journal of economic literature classification numbers d52 c62

motivations monitoring technologies and pay for performance monitoring technologies and pay for performance pfp contracts are becoming popular solutions to improve public services delivery their track record is however mixed to show why this may be the case this paper develops a principal agent model where agents motivations vary and so the effectiveness of monitoring technologies in such a set up it shows that i monitoring technologies should be introduced only if agents motivations are poor ii optimal pfp contracts are non linear non monotonic in agents motivations and monitoring effectiveness iii investments aimed at improving agents motivations and monitoring quality are substitutes when agents are motivated complements otherwise iv if the agents type is private information the more and less motivated agents could be separated through a menu of pfp non pfp contracts designed in a way that only the less motivated ones choose the pfp

the pre programme earnings dip and the determinants of participation in a social programme implications for simple programme evaluation strategies the key to estimating the impact of a programme is constructing the counterfactual outcome representing what would have happened in its absence this problem becomes more complicated when agents such as individuals firms or local governments self select into the programme rather than being exogenously assigned to it this paper uses data from a major social experiment to identify what would have happened to the earnings of self selected participants in a job training programme had they not participated in it we investigate the implications of these earnings patterns for the validity of widely used before after and difference in differences estimators

comparing features of convenient estimators for binary choice models with endogenous regressors abstract we discuss the relative advantages and disadvantages of four types of convenient estimators of binary choice models when regressors may be endogenous or mismeasured or when errors are likely to be heteroscedastic for example such models arise when treatment is not randomly assigned and outcomes are binary the estimators we compare are the two stage least squares linear probability model maximum likelihood estimation control function estimators and special regressor methods we specifically focus on models and associated estimators that are easy to implement also for calculating choice probabilities and regressor marginal effects we propose the average index function aif which unlike the average structural function asf is always easy to estimate

general equilibrium treatment effects a study of tuition policy this paper defines and estimates general equilibrium treatment effects the conventional approach in the literature on treatment effects ignores interactions among individuals induced by the policy interventions being studied focusing on the impact of tuition policy and using estimates from our dynamic overlapping generations general equilibrium model of capital and human capital formation we find that general equilibrium impacts of tuition on college enrollment are an order of magnitude smaller than those reported in the literature on microeconomic treatment effects the assumptions used to justify the late parameter in a partial equilibrium setting do not hold in a general equilibrium setting policy changes induce two way flows we extend the late concept to a general equilibrium setting we present a more comprehensive evaluation to program evaluation by considering both the tax and benefit consequences of the program being evaluated and placing the analysis in a market setting this abstract was borrowed from another version of this item

making the most out of programme evaluations and social experiments accounting for heterogeneity in programme impacts the conventional approach to social programme evaluation focuses on estimating mean impacts of programmes yet many interesting questions regarding the political economy of programmes the distribution of programme benefits and the option values conferred on programme participants require knowledge of the distribution of impacts or features of it this paper presents evidence that heterogeneity in response to programmes is empirically important and that classical probability inequalities are not very informative in producing estimates or bounds on the distribution of programme impacts we explore two methods for supplementing the information in these inequalities based on assumptions about participant decision making processes and about the strength in dependence between outcomes in the participation and non participation states dependence is produced as a consequence of rational choice by participants we test for stochastic rationality among programme participants and present and implement methods for estimating the option values of social programmes

is the threat of reemployment services more effective than the services themselves evidence from random assignment in the ui system we examine the effect of the worker profiling and reemployment services system this program profiles unemployment insurance ui claimants to determine their probability of benefit exhaustion and then provides mandatory employment and training services to claimants with high predicted probabilities using a unique experimental design we estimate that the program reduces mean weeks of ui benefit receipt by about 2 2 weeks reduces mean ui benefits received by about 143 ana increases subsequent earnings by over 1 050 most of the effect results from a sharp increase in early ui exits in the treatment group relative to the control group jel j650

selection on observed and unobserved variables assessing the effectiveness of catholic schools in this paper we measure the effect of catholic high school attendance on educational attainment and test scores because we do not have a good instrumental variable for catholic school attendance we develop new estimation methods based on the idea that the amount of selection on the observed explanatory variables in a model provides a guide to the amount of selection on the unobservables we also propose an informal way to assess selectivity bias based on measuring the ratio of selection on unobservables to selection on observables that would be required if one is to attribute the entire effect of catholic school attendance to selection bias we use our methods to estimate the effect of attending a catholic high school on a variety of outcomes our main conclusion is that catholic high schools substantially increase the probability of graduating from high school and more tentatively attending college we find little evidence of an effect on test scores

evaluating the econometric evaluations of training programs with experimental data this paper takes the results of an employment and training program thatwas run as a field experiment in which the participants were randomlyassigned into a treatment or a control group and compares these results to the estimates that might have been produced by an econometrician who evaluated the program using the same econometric procedures that have been used in the program evaluation literature this comparison shows that many of these econometric procedures fail toreplicate the experimentally determined results and suggests that researchers should be aware of the potential for specification errorsin other nonexperimental evaluations copyright 1986 by american economic association

a non parametric analysis of personal sector decisions on consumption liquid assets and leisure this paper uses the non parametric techniques developed by varian i982 i983 and afriat i967 1973 from the theory of revealed preference see samuelson 1947 to address a number of questions of interest to those who model the determination of consumption liquid assets and leisure hours 1 the primary assumption underlying much work in this area whether it deals with highly aggregated categories such as the consumption of non durables or relatively disaggregated categories such as the consumption of energy products or food is that demand functions for consumer goods are consistent with the hypothesis that they are derived from the maximisation of a well behaved utility function subject to a relevant budget constraint the absence of liquid assets or leisure from such studies involves the implicit assumption of weak separability between consumption goods and these other goods the parametric approach then assumes a particular functional form for either the utility function indirect utility function or cost function and estimates the parameters that best describe the data however as varian i983 points out when it comes to testing hypotheses in such a framework it is always a joint hypothesis comprising both the restrictions and the choice of functional form which is being tested 2 to avoid this problem varian developed the nonparametric revealed preference approach to provide algebraic conditions which are imposed by maximising behaviour on a set of data with a finite number of observations this non parametric approach is exploited here in several ways there have been a number of studies using a parametric approach at a fairly disaggregated level to the determinants of consumers expenditure see for example deaton i974 anderson and blundell i982 and ray i984 for applications using

estimating marginal returns to education this paper estimates marginal returns to college for individuals induced to enroll in college by different marginal policy changes the recent instrumental variables literature seeks to estimate this parameter but in general it does so only under strong assumptions that are tested and found wanting we show how to utilize economic theory and local instrumental variables estimators to estimate the effect of marginal policy changes our empirical analysis shows that returns are higher for individuals with values of unobservables that make them more likely to attend college we contrast our estimates with iv estimates of the return to schooling

performance competition in local media markets abstract this paper investigates the impact of tax and public service performance on english local government popularity by using data on local property taxes service performance ratings and local election results after the introduction of a system of evaluation of local government performance comprehensive performance assessment the evidence emerging from estimation of a re election equation offers a somewhat more rounded portrait of the voter than the conventional fiscal conservative icon by highlighting the beneficial consequences of public service performance on government popularity and pointing to the role of local media networks the bbc regional television local radio and web network in shaping consensus by spreading tax related information

market demand functions in the capital asset pricing model abstract we demonstrate that in a capm economy homogeneity walras law and the tobin separation property characterize market demand on finite sets of prices consequently for any number n there exist capm economies which have at least n equilibria and hence have n different beta pricing formulas endowment perturbations in these economies cannot decrease the number of equilibria below n journal of economic literature classification numbers c62 d51 d52 g12

incentives and targets in hospital care evidence from a natural experiment performance targets are commonly used in the public sector despite their well known problems when organisations have multiple objectives and performance is difficult to measure it is possible that such targets may work where there is considerable consensus that performance needs to be improved we investigate this possibility by examining the response of the english national health service to high profile waiting time targets we exploit a natural policy experiment between two countries of the uk england and scotland to establish the global effectiveness of the targets we then use a within england hospital analysis to confirm that responses vary by treatment intensity and to control for differences in resources which may accompany targets we find that targets met their goals of reducing waiting times without diverting activity from other less well monitored aspects of health care and without decreasing patient health on exit from hospital

incorporating nonmarket time into benefit cost analyses of social programs an application to the self sufficiency project abstract benefit cost analysis is used extensively in the evaluation of social programs often the success or failure of these programs is judged on the basis of whether the calculated net benefits to society are positive or negative almost all existing benefit cost studies of social programs count entire increases in income accruing to participants in a social program as net benefits to society however economic theory implies that the conceptually appropriate measure of the impact of a government program on any group of individuals is the net change in their surplus or economic rent rather than the net change in their income for example if a social program causes increases in income by increasing work hours then the lost nonmarket time that accompanies these increases has value that needs to be counted as a cost when assessing the merits of that program in this paper we develop a methodology for incorporating lost nonmarket time into benefit cost analyses of social programs we apply our methodology to the self sufficiency project ssp an experimental welfare to work program tested on a pilot basis in two provinces in canada during the 1990s we find that if losses in nonmarket time are ignored ssp yields a substantial positive net benefit to society however if losses in nonmarket time are taken into account the net societal benefits are greatly reduced even becoming negative in certain instances we conclude that future benefit cost analyses of social programs must take effects on nonmarket time into account in order to give a more accurate picture of the net benefits of the program

revealed yardstick competition local government efficiency patterns in norway this paper investigates whether the production efficiency of norwegian local governments exhibits a spatial pattern that is compatible with the hypothesis of yardstick competition in order to check whether yardstick competition is really responsible for the observed spatial pattern and rule out alternative theoretical explanations the paper exploits unique information from a survey on local politicians attitudes towards comparative evaluation of local bureaus performances against other jurisdictions benchmarking merging the latter information with the observed interdependence in efficiency the paper provides evidence that comparative performance evaluation generates positive spatial auto correlation in local efficiency indicators

the compelling effects of compulsory schooling evidence from canada abstract compulsory school laws have existed for more than a hundred years and policies to mandate further education continue to be discussed the implications of these laws however are not well understood historical changes to compulsory schooling in canada permit an examination of their effects on would be dropouts under very different circumstances than those during changes in other countries mandating education substantially increased adult income and substantially decreased the likelihood of being below the low income cut off unemployed and in a manual occupation these findings suggest significant gains from this legislation which seem unlikely offset by the costs incurred while having to remain in school jel classification i20 i28

human capital investment and the gender division of labor in a brawn based economy we use a model of human capital investment and activity choice to explain facts describing gender differentials in the levels and returns to human capital investments these include the higher return to and level of schooling the small effect of healthiness on wages and the large effect of healthiness on schooling for females relative to males the model incorporates gender differences in the level and responsiveness of brawn to nutrition in a roy economy setting in which activities reward skill and brawn differentially empirical evidence from rural bangladesh provides support for the model and the importance of the distribution of brawn

savage in the market we develop a behavioral axiomatic characterization of subjective expected utility seu under risk aversion given is an individual agent s behavior in the market assume a finite collection of asset purchases with corresponding prices we show that such behavior satisfies a revealed preference axiom if and only if there exists a seu model a subjective probability over states and a concave utility function over money that accounts for the given asset purchases

the use and usefulness of performance measures in the public sector the paper focuses on the empirical evidence on the use and usefulness of performance measures in the public sector it begins with consideration of the features of the public sector which make the use of performance measures complex the issues of multiple principals and multiple tasks it discusses the form that performance measures may take the use made of these measures and the responses that individuals may make to them empirical examples from the fields of education and health with a focus on the usa and uk are examined there is clear evidence of responses to such measures some of these responses improve efficiency but others do not and fall into the category of gaming generally there has been little assessment of whether performance measures bring about improvements in service the paper ends with consideration of how such measures should be used and what measures are useful to collect

assessing the impact of a school subsidy program in mexico using a social experiment to validate a dynamic behavioral model of child schooling and fertility this paper uses data from a randomized social experiment in mexico to estimate and validate a dynamic behavioral model of parental decisions about fertility and child schooling to evaluate the effects of the progresa school subsidy program and to perform a variety of counterfactual experiments of policy alternatives our method of validation estimates the model without using post program data and then compares the model s predictions about program impacts to the experimental impact estimates the results show that the model s predicted program impacts track the experimental results our analysis of counterfactual policies reveals an alternative subsidy schedule that would induce a greater impact on average school attainment at similar cost to the existing program

the promise and pitfalls of using imprecise school accountability measures in recent years most states have constructed elaborate accountability systems using school level test scores however because the median elementary school contains only 69 children per grade level such measures are quite imprecise we evaluate the implications for school accountability systems for instance rewards or sanctions for schools with scores at either extreme primarily affect small schools and provide weak incentives to large ones nevertheless we conclude that accountability systems may be worthwhile even in states with aggressive financial incentives the marginal reward to schools for raising student performance is a small fraction of the potential labor market value for students

on nonparametric demand analysis abstract building on the work of afriat and varian a nonparametric analysis of consumption behavior is presented inner bound and outer bound representations of preferences are obtained that are consistent with both the data and consumer theory it is shown how a priori information on demand response can be incorporated in the analysis the approach generates estimates of price and income elasticities of demand an application to u s consumption data illustrates the usefulness of the method for predicting demand behavior as well as for welfare analysis

better late than nothing some comments on deaton 2009 and heckman and urzua 2009 two recent papers deaton 2009 and heckman and urzua 2009 argue against what they see as an excessive and inappropriate use of experimental and quasi experimental methods in empirical work in economics in the last decade they specifically question the increased use of instrumental variables and natural experiments in labor economics and of randomized experiments in development economics in these comments i will make the case that this move towards shoring up the internal validity of estimates and towards clarifying the description of the population these estimates are relevant for has been important and beneficial in increasing the credibility of empirical work in economics i also address some other concerns raised by the deaton and heckman urzua papers

the integration of child tax credits and welfare evidence from the national child benefit program abstract in 1998 the canadian government introduced a new child tax credit the innovation in the program was its integration with social assistance welfare some provinces agreed to subtract the new federally paid benefits from provincially paid social assistance partially lowering the welfare wall other provinces did not integrate benefits providing a quasi experimental framework for estimation we find large changes in social assistance take up and employment in provinces that provided the labour market incentives to do so in our sample the integration of benefits can account for between 19 and 27 of the decline in social assistance receipt between 1997 and 2000

information sharing in common agency when is transparency good when should principals dealing with a common agent share their individual performance measures about the agent s unobservable effort for producing a public good in a model with two principals who offer linear incentive schemes we show that information sharing always increases total expected welfare if the principal who is less informed about the agent s effort also cares more about the agent s output if the less informed principal cares somewhat but not too much less than the other principal about the agent s output information sharing reduces total expected welfare in our model the efficient information regime emerges as an equilibrium outcome

can helping the sick hurt the able incentives information and disruption in a welfare reform the uk jobcentre plus reform sharpened bureaucratic incentives to help disability benefit recipients relative to unemployment insurance recipients into jobs in the long run the policy raised exits off diasability benefits by 10 and left unemployment outflows roughly unchanged consistent with i beneficial effects of reorganising welfare offices for both groups and ii a shift in bureaucrats efforts towards getting disability benefit recipients into jobs relative to those on unemployment benefit the policy accounted for about 30 of the decline in the aggregate disability rolls between 2003 and 2008 in the short run however we detect a reduction in unemployment exits and no effect on disability exits suggesting important initial disruption effects from the big reorganisation this highlights the difficulty of welfare reform as policymakers may focus on the short run political costs rather than the long run economic benefits

substitution and dropout bias in social experiments a study of an influential social experiment this paper considers the interpretation of evidence from social experiments when persons randomized out of a program being evaluated have good substitutes for it and when persons randomized into a program drop out to pursue better alternatives using data from an experimental evaluation of a classroom training program we document the empirical importance of control group substitution and treatment group dropping out evidence that one program is ineffective relative to close substitutes is not evidence that the type of service provided by all of the programs is ineffective although that is the way experimental evidence is often interpreted

existence of equilibrium in capm abstract in the mean variance capital asset pricing model capm non monotonicity of preferences may lead to satiation and short selling as well as satiation may lead to non existence of equilibrium this paper identifies several sets of sufficient conditions for equilibrium to exist the nature of the central conditions is to impose bounds on the investors degree of risk aversion as measured by the marginal rate of substitution between mean and standard deviation of return these bounds do not need to hold globally but only in a relevant range of portfolios or combinations of mean and standard deviation