This paper uses an unbalanced panel dataset to evaluate how repeated job search services (JSS) and personal characteristics affect the employment rate of the prime-age female welfare recipients in the State of Washington. We propose a transition probability model to take into account issues of sample attrition, sample refreshment and duration dependence. We also generalize Honoré and Kyriazidou's [Honoré, B.E., Kyriazidou, E., 2000. Panel data discrete choice models with lagged dependent variables. Econometrica 68 (4), 839-874] conditional maximum likelihood estimator to allow for the presence of individual-specific effects. A limited information test is suggested to test for selection issues in non-experimental data. The specification tests indicate that the (conditional on the set of the confounding variables considered) assumptions of no selection due to unobservables and/or no unobserved individual-specific effects are not violated. Our findings indicate that the first job search service does have positive and significant impacts on the employment rate. However, providing repeated JSS to the same client has no significant impact. Further, we find that there are significant experience-enhancing effects. These findings suggest that providing one job search services training to individuals may have a lasting impact on raising their employment rates. We propose a transitional probability model of finding employment or staying on employment as a means to take into account issues arising from sample attrition, sample refreshment and duration dependence. Being state dependent, employment or nonemployment, a transition probability model accommodates dynamics in a simple format. We estimate our transitional probability model under the assumptions of (1) conditional independence (CIA) (namely, participation in JSS can be considered exogenous conditional on the confounding variables) and (2) no individual-specific effects. We also generalize Honoré and Kyriazidou's (2000) conditional maximum likelihood estimator to allow for the presence of individual-specific effects. A limited information test is suggested to test for selection issues in non-experimental data. The specification tests indicate that the assumptions of no selection due to unobservables and/or no unobserved individual-specific effects are not violated.
HHS Public AccessAuthor manuscript J Econom. Author manuscript; available in PMC 2015 June 04.We find that only the first Job Search Services had positive and statistically significant impacts on employment rates. The probabilities of employment are increased by about 3.6% for the non-employed and by 3.4% for the employed. Repeating JSS does not appear to raise the probability of employment. We also find that each additional quarter of non-employment reduces the probability of employment by 2.9% and each additional quarter of employment raises the probability of employment by 2.3%. The "experience-enhancing" effect together with the finding that the first JSS does raise the probability of employme...