da Costa Dias, Monica Sofia Rodrigues; (2002) Essays on the evaluation of social programmes. Doctoral thesis (Ph.D), UCL (University College London).

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Abstract

This thesis focus on the evaluation of social programmes, a subject attracting renewed interest given the deteriorating labour market position of unskilled workers in many industrialised countries and the large financial requirements programmes designed to move individuals away from welfare place on public budgets. Non-experimental methods face the difficult missing counterfactual problem, where individuals are either participants or non-participants, not both simultaneously. I use different approaches to assess the impact of interventions using the New Deal for Young Persons (NDYP) as role model. This UK mandatory program involves extensive job-search assistance and options that include tax credit schemes and education subsidies. Chapters 2 and 3 address the evaluation of direct effects of interventions. I start by reviewing the recent methodological developments discussing social experiments, natural experiments, matching methods and instrumental variables in chapter 2. Chapter 3 presents the evaluation of the employment effect of the NDYP. Identification exploits the differential timing of the programme introduction across regions and age-related eligibility rules and estimation uses a variety of techniques combining "difference in differences" and matching procedures. Being a global programme of wide implementation, the NDYP is expected to impact on prices, indirectly affecting the whole economy and challenging the validity of counterfactuals constructed from observed data. Chapters 3 and 4 focus on the structural overall evaluation of a stylised version of the NDYP initiative, avoiding "no-indirect-effects" assumptions. A general equilibrium model of savings, skills and human capital with labour supply is developed within an overlapping generations set up, allowing for idiosyncratic uncertainty under risk aversion, fixed costs and discrete working and studying choices. The model's parameters are identifiable with currently available data and a procedure to estimate the human capital production function is proposed. The model was numerically solved for the SS and the effects of tax credit policies were simulated.

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