Evaluating the effectiveness of Washington state repeated job search services on the employment rate of prime-age female welfare recipients

Abstract

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...

Diversification Strategies and Firm Performance: A Sample Selection Approach

“…So far various tests have been proposed by Verbeek and Nijman (1992), Vella (1998), Wooldridge (1995), Das et al (2003), Hsiao et al (2008), and Semykina and Wooldridge (2010). While Verbeek and Nijman (1992), and Hsiao et al (2008) propose the test for panel data models with exogenous explanatory variables, Semykina and Wooldridge (2010) use fixed effects to remove unobserved heterogeneity, and hence, permit arbitrary correlation between idiosyncratic errors and regressors. The test is based on the within transformation and has an importance advantage over alternative testing procedures because it is valid in the presence of arbitrary correlation between unobserved heterogeneity and explanatory variables.…”

Evaluating the impacts of Washington state repeated job search services on the earnings of prime‐age female TANF recipients

“…To take account of issues of sample attrition, sample refreshment and duration dependence, the state of employment and unemployment are modeled by transitional probabilities as in Hsiao et al (2005). The transitional probability model can be considered as the outcomes of two potential states that are state dependent.…”

“…Using case managers' designation and other available socio-demographic variables that are excluded from specification (5) as instruments, the diagnostic checks conducted by Hsiao et al (2005) show that, conditional on x and w, we may invoke the conditional independence assumption of Rosenbaum and Rubin (1983). Furthermore, as pointed out by a referee that if JSS participation acted as a proxy for unobservables, one would expect it to affect both unemployment and employment duration, but we found that JSS decreases unemployment duration but not employment duration.…”

“…Since over 70% of the entrants to welfare are former TANF recipients and the average annual cost per case is high ($12,363 in 1998), it is important to know if such services fundamentally changed the labor market outcomes. Hsiao et al (2005) have investigated whether it is efficient to provide JSS to the same welfare recipients repetitively by considering the probability of employment. Their results show that the first JSS does have positive and significant impacts on the employment rate of those who are initially unemployed.…”

“…We propose to take a parametric approach to control the confounding effects of both observable and unobservable factors that may vary across individuals and over time. The study by Hsiao et al (2005) focuses on analyzing the effects of JSS through their impacts on employment probability. However, it is not clear if repeated JSS indeed affect the earnings of welfare recipients and, if they do, by how much.…”