Essays on event history analysis and the effects of social programs on individuals and firms

Abstract

Lombardi, S. 2019. Essays on Event History Analysis and the Effects of Social Programs on Individuals and Firms. Economic studies 180. 150 pp. Uppsala: Department of Economics. ISBN 978-91-506-2769-5.

Essay I: This paper studies threat effects of unemployment insurance (UI) benefit sanctions on job exit rates. Using a difference-in-differences design, I exploit two reforms of the Swedish UI system that made monitoring and sanctions considerably stricter at different points in time for different jobseeker groups. I find that men and long-term unemployed respond to the stricter UI rules by finding jobs faster. I also estimate the effect of receiving a sanction on the job exit rates, and find significant sanction imposition effects. However, a decomposition exercise shows that these effects explain very little of the overall reform effects, which instead are driven the threat of sanction imposition.

Essay II: (with Gerard J. van den Berg and Johan Vikström): We use an Empirical Monte Carlo design and rich administrative data to generate realistic placebo treatment durations. First, we highlight important confounders to be controlled for when estimating selection models. Next, we omit some of the covariates used to simulate placebo treatments, and we estimate Timing-of-Events models. The model is generally able to adjust for a large share of the resulting unobserved heterogeneity. However, we find that specifying too many or too few support points to approximate the unobserved heterogeneity distribution leads to large bias. Information criteria that penalize parameter abundance can help selecting the appropriate number of support points.

Essay III: (with Oskar Nordström Skans and Johan Vikström): We study how targeted wage subsidies affect the performance of the recruiting firms. Using Swedish linked employer/employee data from 1998–2008, we show that the firms hiring through subsidies substantially outperform other recruiting firms, despite identical pre-treatment performance levels and trends in a wide set of key dimensions. The pattern is less clear from 2007 onwards, after a reform removed the involvement of caseworkers from the subsidy approval process. Our results suggest that targeted employment subsidies can have large positive effects on outcomes of the hiring firms, at least if the policy environment allows for pre-screening by caseworkers.

Essay IV: (with Raffaella Piccarreta and Marco Bonetti): We propose different methods for comparing the ability of competing non-nested event history models to generate trajectories that are similar to the observed ones. We first introduce alternative criteria to compare pairwise dissimilarities between observed and simulated sequences. Next, we estimate two alternative multi-state models using data on family formation and childbearing decisions from
the Dutch Fertility and Family Survey. We use the estimated models to simulate event histories and to illustrate the proposed comparison criteria.

Keywords: Labor Economics, Unemployment Insurance, Job Search, Monitoring and Sanctions, Policy Evaluation, Dynamic Treatment Evaluation, Duration Analysis, Firm performance, Employer-employee Match, Monte Carlo simulation