samlet årgang - Økonomisk Institut - Københavns Universitet

178
NATIONALØKONOMISK TIDSSKRIFT 2005. NR. 2
TADD =[YT t –Y 1 T
t )–(Y 0 C
t –Y 1 C t )] – [Y 0 T t –Y
** T t )–(Y
* C
t –Y
** C
t )] (2)
*
where Y T and Y C are the mean outcomes for the VERP sample and the control group
respectively.
In order to identify a period in which a macro trend similar to the trend around 1992
has occurred, a figure corresponding to Figure 2 but excluding observations for 1992
is constructed (see Figure A.1 in the Appendix). If observations for 1990 and/or 1994
are included, it is not straightforward to identify a period in which the macro trend is
similar to the trend around 1992. Therefore, the period 1991-1993 is used. Comparing
the development in this period to the development in the preceding years, the period
1988-1989 seems to be the most appropriate choice. In other words, t * is set equal to
1988, while t ** is set equal to 1989. By using observations for 1991, it is assumed that
the announcement of the policy change in 1992 did not affect the estimated effect of
this change, while the use of observations for 1993 implies that only short run effects
are examined. 18,19
The trend adjusted difference-in-differences estimate of the effect of the change in
the VERP policy in 1992 is computed in an OLS regression on repeated cross sections
consisting of pooled micro data for groups and years. The regressors consist of dummies
for years and groups, a dummy to adjust for the different macroeconomic effect
and interaction terms for these dummies. A vector of individual characteristics is also
added:
Yijt = 1X’ ijt + 2 AFTERt + 3 VERPi + 4ADJUSTj + 5 (AFTERt *VERPi ) +
6 (AFTERt *ADJUSTj ) + 7 (VERPi * ADJUSTj ) +
8 (AFTERt *VERPi * ADJUSTj ) + ijt (5)
The dependent variable (Y it ) is the retirement age for individuals retiring the year in
question in the analysis of the whole sample of 60-66-year-olds. The included individual
characteristics (X it ) are gender, education, cohabitation status, experience, lagged
18. The choice of the previous period (1988-1989) rests on Figure A.1. However, one might argue that this
choice is made unconditional of all other kinds of characteristics such as macro shocks and trends in the
composition of the groups with respect to e.g. education. Nevertheless, controlling for the unemployment
level by gender and for changes in the vocational/higher education ratio within each group over time, the
period 1988-1989 still seems to be an appropriate choice in the case of VERP2. Conversely, VERP1 and
PEP do not move in parallel in this period. However, the small sample size for PEP implies that caution
must be taken in interpreting these results.
19. A similar approach has been applied in Blundell and Costa Dias (2000) in an evaluation of the New
Deal for Young People, an initiative of the UK government to help young unemployed people make their
way into or back to work. In this study, the outcome of interest is the outflow from the jobseeker’s allowance
claimant count.