Evaluation of the Australian Wage Subsidy Special Youth ...

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xvi validity for the robustness of employment gains to SYETP are provided by the variations in method and assumptions. The orthodox approach of adopting only one potentially appropriate selection approach and underlying assumption of observables or unobservables is challenged. A sensitivity analysis showing variation to employment effects for changes in key modelling assumptions can give a confidence interval accounting for statistical modelling uncertainty. It is concluded that the benefits are an informed overview of the role of the assumption to the evaluation outcome. Keywords: labour market program evaluation; non-experimental methods; panel/longitudinal survey data; attrition; missing data; Heckman bivariate probit; propensity score matching; replication. JEL classification: C14, C35, C40, J64, J68, H43.
1 1: Wage subsidy theory and evaluation 1.1 Structure of this research The first chapter introduces the motivation for the substantive research that forms the later chapters. Following a general introduction to the themes which are developed in the research, the theory of wage subsidies is reviewed. A brief preface then presents the key issues in evaluation of social programs such as wage subsidies. Empirical evidence for wage subsidies is then treated in several parts. Firstly, a selection of conclusions from overseas evaluations for wage subsidies is canvassed in an overview that gives a background for the Australian studies that follow in subsequent chapters and form the substance of this research. Only very recent work is included in this overseas appraisal, as several very comprehensive reviews have lately been published in this area. The chief aim is to draw out useful questions that are addressed later within this study. Australian wage subsidies are not covered in this chapter, but are the focus of the next chapter. Australian wage subsidies are reviewed in Chapter 2. A historical essay presents an overview of the operation and economic environment of SYETP. The context is then useful in assessing the processes for participation and employment for evaluation modelling. The past evaluation evidence relating to SYETP is critically assessed. In an effort to maintain clarity of exposition, the theory associated with the econometric techniques applied is not in the literature review. Instead, each method is expounded within each later study where they are applied. As a result, propensity score matching methods for example, are discussed in study 2 where they are first applied. As a result of the critical review of past evaluation attempts of SYETP, a series of studies present new evidence for SYETP which attempt to account for the imperfections identified in past evidence. This is then new evidence for the Australian wage subsidy program, SYETP.
Page 1: i Evaluation of the Australian Wage
Page 5 and 6: v Declaration I hereby declare that
Page 7 and 8: in method and assumptions. The orth
Page 9 and 10: 3.3 Data and variables used for est
Page 11 and 12: List of Tables and Figures Figure 1
Page 13 and 14: Table A2.0b Univariate Probit of pa
Page 15: xv Abstract The job subsidy Special
Page 19 and 20: 3 programs of providing benefits an
Page 21 and 22: 5 The empirical methods used for th
Page 23 and 24: 7 how the outcomes from these metho
Page 25 and 26: 9 employment effect could be mainly
Page 27 and 28: 11 Real Wage Employment Figure 1.1:
Page 29 and 30: 13 are two types of unemployment, s
Page 31 and 32: 15 Real wages are predetermined whe
Page 33 and 34: 17 Vella (1998), Heckman, Lalonde a
Page 35 and 36: 19 Each individual has two potentia
Page 37 and 38: 21 this case, if there was no data
Page 39 and 40: 23 correlation for the error of the
Page 41 and 42: 25 Table 1.3 collects together some
Page 43 and 44: 27 Table 1.3 Brief overview of rece
Page 45 and 46: 29 necessarily brief. Then, the evi
Page 47 and 48: 31 limited applications, such as fo
Page 49 and 50: 33 who participated. It was conclud
Page 51 and 52: 35 term unemployed for over 12 of t
Page 53 and 54: 37 importance of the subsidy second
Page 55 and 56: 39 differences in characteristics t
Page 57 and 58: 41 Matching methods are theoretical
Page 59 and 60: 43 2.2 SYETP implementation As SYET
Page 61 and 62: 45 In July1978, the subsidy was cal
Page 63 and 64: 47 In January 1979, variations were
Page 65 and 66: 49 benefits were paid at a slightly
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51 2.2.3 SYETP operation Earlier re
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53 ceiling constraints’ applied t
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55 Award Conditions for employment
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57 Harris (2001) claims that during
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59 display boards listed details of
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61 restriction was used. If there w
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63 to the end of the 1980’s. An o
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65 for teens overall had risen, emp
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67 for Australia using data from th
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69 training, can provide a form of
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71 employer survey estimates were t
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73 provisions for SYETP and extende
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75 withdrawals occurred at similar
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77 Table 2.17 State usage of progra
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79 2.3.1 Stretton (1982, 1984) 53 S
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81 Stretton attributed the success
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83 included in the employment model
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85 completers. Their argument was t
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87 was an issue for the data. Unlik
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89 Table 2.21 Richardson (1998) Est
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91 2.3.5 General discussion Some ge
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93 Controlling for differences in i
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95 taken by a previous researcher a
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97 If employability is assumed to b
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99 suitability of the underlying as
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101 Heckman, Lalonde and Smith (199
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103 effect on employment relative t
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105 Table 3.1, Part A Employment eq
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107 (-1.80) (-1.80) Tradesperson -0
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109 duration of Pre-June 1984 unemp
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111 4: Study 2 Propensity score mat
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113 Propensity score matching provi
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115 4.2 Propensity score matching m
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117 covariates that influence the a
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119 (7) E(Y c | D=1) = E P(X) {E[Y
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121 For CIA to be plausible, a ‘r
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123 employment and programme partic
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Highest qualification in 1984 (1.56
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127 4.6 Distribution of the propens
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129 Figure 4.3 Histograms of estima
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131 Table 4.5 Summary statistics fo
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133 Table 4.5, that the variance of
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135 Table 4.6 Matching results, Sin
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137 Table 6.3 using Swedish data wi
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139 matching is the ability to weed
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141 Table 4.7 Matching results, All
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143 the unobserved component. If th
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145 5: Study 3 Attrition and non-re
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147 occur by design, because the mi
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149 (1990) extended and improved th
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151 (10) A* = δ 0 + δ 1 x +δ 2 z
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153 again from September to Novembe
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155 5.5.2 Univariate examination of
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157 lower, the job lengths are only
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159 Work limited by health 1984 0.1
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161 The characteristics of the SYET
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163 para-professional Mother not em
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165 comparison group where the shar
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167 5.5.4 Attrition: natural attrit
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169 both sources that impose change
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171 para-professional Father not em
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173 work in later sections, this su
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175 Table 5.6: Effect of selection/
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177 appropriate to discard these fr
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179 Australia/Tasmania. Amongst tho
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181 Table 5.5a Summary statistics b
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183 5.6.1.2 Effects of the non-resp
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185 3 years + -0.35 -0.47 -0.34 -0.
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187 5.7 Multivariate analysis of ef
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189 proportion of time spent unempl
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191 post-school qualification, and
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193 Generally, those variables foun
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195 longj0 Longest job by 1984 < 1
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197 adopted in order to maintain co
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199 6: Study 4 Weighting to counter
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201 Table 6.1, part A Employment eq
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203 Methodist 0.133 0.261 (0.77) (1
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205 CEP referrals 1984 0.143* 0.128
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207 6.2 Results of weighting the PS
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209 The distribution of the propens
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211 Table 6.3 Weighted probit used
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213 (0.76) Tradesperson mtrad 0.20
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215 Table 6.5 Summary statistics fo
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217 Table 6.7 Matching results, sin
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219 6.3 Discussion The comparison o
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221 the selection into SYETP and th
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223 Heteroskedasticity is a violati
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225 Table 7.1, Part A Employment eq
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227 (1.26) (1.28) (1.16) Mothers oc
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229 Other Post-School qualification
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231 7.1.2 Exclusion restriction in
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233 Finally, the third panel of new
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235 Table 7.2 summary of changes to
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237 schooling that was statisticall
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239 (0.25) (0.21) 3 years + -0.50 -
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241 Table 7.4 Summary of distributi
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243 7.2.2 Propensity score matching
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245 original model, but with the pe
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247 maintained, then the Heckman bi
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249 Table 7.6 Weighted Probit used
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251 Table 7.7 Summary of distributi
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253 8: Summary and Conclusions The
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255 over which it ran, the review m
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257 the Heckman and PSM methods wer
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259 posited that that such sensitiv
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261 Description Derivation and deta
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Appendix 2 Tables 263
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2 years 0.28 0.07 (1.70) (1.70) 3 y
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267 Table A2.0b Univariate Probit o
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269 Religion brought up in (1.52) (
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271 hq9_84 Year 9 of school or less
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273 Table A2.1 Continued Means and
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275 mtrad Tradesperson 0.04 0.04 0.
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277 Year 9 of school or less -0.19
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279 Table A2.3 Probit of SYETP part
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281 (0.22) (0.44) (0.67) (0.89) Tra
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283 Table A2.5a Univariate probit f
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285 Manager/professional/para-profe
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3 years + -0.04 (2.13)* CEP referra
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289 Table A2.6 Part A Employment eq
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291 Table A2.6 Part B Selection/par
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301
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BLMR Bureau of Labour Market Resear
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Fay, R.G. (1996) "Enhancing the eff
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Heckman J.J. and Smith, J. A. (1998
Page 325 and 326:
Lewis, H.G. (1963) "Unionism and re
Page 327 and 328:
Quandt, R. (1972) "A new approach t
Page 329 and 330:
Stromback, M. and Dockery, A. (2000
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