The evaluation of labour market treatment effects is one of the most actively researched areas in applied econometrics. Getting good estimates of policy relevant parameters presents some quite technically challenging issues.
But sometimes you really don't need all that. The story below from yesterday's Sunday Business Post gave quite a staggering example of this. A program to get the long term unemployed back to work cost €39m with 46 participants (i.e. almost €900k each) and apparently did not get any of them back to work.
The article adds "Forfas said the state was spending €970 million on a number of jobs and training programmes, but found that there was ‘‘significant information deficit’’, in terms of being able to measure their ‘efficiency and effectiveness’ ".
Indeed. The resources necessary to do a first class evaluation of such programs would be trivial by comparison.
http://www.sbpost.ie/news/failed-work-programme-cost-state-almost-900k-per-person-48270.html
I'd like to see a controlled experiment: just give the money to half the participants on the condition they set up a business and employ, say, five others. Hell I could employ 30 graduates for that sort of largesse!
ReplyDeleteThe problem now is that all attempts at programmatic intervention are being dumped in the same bin. People like Colm McCarthy and others think of this type of waste when they think of active intervention.
ReplyDeleteOn a somewhat more optimistic note, it does go to show again that much of what we spent our money on during the silly years of 2002-2007 was so utterly pointless that the welfare declines from consumption in Ireland may be less than we might imagine.
To a first approximation, McCarthy may be right alas.
ReplyDeleteI'm not sure I understand your 2nd point: are you saying that it was just a re-distribution from tax-payers to programs participants /FAS employees etc?
second point flippant but basically stories like this hardly suggest that we were operating efficiently during this period. less money might buy a lot more now if we could get our act together.
ReplyDeleteGerard/Liam
ReplyDeleteFor that kind of money you could certainly do better.I'd like to see some experiments.
I can't really tell from here (US) but is there any fresh thinking in Ireland on unemployment? It looks omenously like the 1980s. A lot was learned then, maybe its time to draw on the lessons?
I don't know about lessons from the 80s Kevin. This time really is different: a declining 20-something population + fewer emigration opportunities + more generous social welfare = a disturbing risk of Spanish like youth unemployment levels (which never really went away during their boom). Back to insider/outsider explanations?
ReplyDeleteThat would be very 80s...
Well its always different but you have to draw on what you know. Actually what you have in mind are the macro parameters but I am thinking of the lessons that were learned about the efficacy of micro policies which may not be so sensitive to the issues you raise. I am thinking of some of the cross-country work on unemployment that came out of the LSE, for example Jackman, Layard & Nickell's work which has recently been updated. I don't have it to hand but one of the issues that came out, as far as I can remember, is that its not simply the level of unemployment benefits that affects unemployment but how it is administered: structure and administration matters a lot. These things could be changed, possibly at little cost, and may be effective in increasing job search.
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