Evaluating search and matching models using experimental data

Jeremy Lise, Shannon Seitz, Jeffrey Smith

Research output: Contribution to journalArticlepeer-review

6 Scopus citations

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 search 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. JEL Classification:J2; I38; J6

Original languageEnglish (US)
Article number16
JournalIZA Journal of Labor Economics
Volume4
Issue number1
DOIs
StatePublished - Dec 1 2015
Externally publishedYes

Bibliographical note

Publisher Copyright:
© 2015, Lise et al.

Keywords

  • Policy experiments
  • Search and matching
  • Self-sufficiency project
  • Social experiments

Fingerprint

Dive into the research topics of 'Evaluating search and matching models using experimental data'. Together they form a unique fingerprint.

Cite this