Choosing the best training programme: Is there a case for statistical treatment rules?

Abstract

When treatment effects of active labour market programmes (ALMPs) are heterogeneous in an observable way across the population, the allocation of the unemployed into different programmes becomes particularly important. In this article, we present a statistical model that can be used to allocate unemployed into different ALMPs. The model presented is a duration model that uses the timing-of-events framework to identify causal effects. We compare different assignment rules, and the results suggest that a significant reduction in the average duration of unemployment may result if a statistical treatment rule is introduced. © Blackwell Publishing Ltd and the Department of Economics, University of Oxford, 2010.