Answered step by step
Verified Expert Solution
Question
1 Approved Answer
country A wants to evaluate its unemployment insurance (UI) program and it asks for your assistance. You decide to estimate the causal effect of benefit
country A wants to evaluate its unemployment insurance (UI) program and it asks for your assistance. You decide to estimate the causal effect of benefit generosity on unemployment duration. While learning about Country A's UI program, you discover that workers who are laid off at a later age receive more generous benefits. Specifically, you find out that the benefit schedule as a function of the worker's exact age (in months) when laid off has the following structure: Weekly benefit 40 Age at Layoff You recognize that the benefit schedule has a discontinuity that provides you with a "natural experiment" (or a "quasi experiment"). Describe how you could use a regression-discontinuity (RD) design to estimate this effect. Describe the treatment group and the control group and explain how you would estimate the effect of benefit generosity on unemployment duration. A verbal description is sufficient
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started