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Does Centralization Imply Better Targeting?: Evaluating Emergency Employment Programs in Chile

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  • Rómulo Chumacero
  • Ricardo Paredes

Abstract

This paper develops direct tests for evaluating the performance of two types of emergency employment programs put in place in Chile since 1999. Our results suggest: First, decentralized and “market-driven” programs (subsidies for hiring and training) are more efficient in terms of productivity, but are targeted to people that are less vulnerable to unemployment. Second, direct employment programs result in moderate increases of the income of the households of the participants. This increase may be outweighted by the costs (in present value) associated with higher school drop-out and participation rates. Third, if analysed at a municipality level (comuna), centralized programs do not target municipalities with higher unemployment, increased vulnerability to unemployment, or even lower median income levels, but are strongly correlated with the political affiliation of its major. Finally, our results suggest that the population targeted in direct employment programs is not more vulnerable to unemployment than the actually unemployed.

Suggested Citation

  • Rómulo Chumacero & Ricardo Paredes, 2002. "Does Centralization Imply Better Targeting?: Evaluating Emergency Employment Programs in Chile," Working Papers wp199, University of Chile, Department of Economics.
    • Handle: RePEc:udc:wpaper:wp199
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    References listed on IDEAS

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    1. Pedro Carneiro & Karsten T. Hansen & James J. Heckman, 2002. "Removing the Veil of Ignorance in Assessing the Distributional Impacts of Social Policies," NBER Working Papers 8840, National Bureau of Economic Research, Inc.
    2. Barbara Sianesi, 2001. "Differential effects of Swedish active labour market programmes for unemployed adults during the 1990s," IFS Working Papers W01/25, Institute for Fiscal Studies.
    3. Rajeev H. Dehejia & Sadek Wahba, 2002. "Propensity Score-Matching Methods For Nonexperimental Causal Studies," The Review of Economics and Statistics, MIT Press, vol. 84(1), pages 151-161, February.
    4. Raphael Bergoeing & Felipe Morandé, 2002. "Crecimiento, Empleo e Impuestos al Trabajo: Chile 1998-2001," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 39(117), pages 157-174.
    5. Maloney, William F., 2001. "Evaluating emergency programs," Policy Research Working Paper Series 2728, The World Bank.
    6. Cristian Aedo, "undated". "The Impact of Training Policies in Latin America and the Caribbean: The Case of "Programa Joven"," ILADES-UAH Working Papers inv131, Universidad Alberto Hurtado/School of Economics and Business.
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    Cited by:

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    2. James O’Brien, 2020. "Public Works and Children’s School Attendance: Evidence from Rural India," Review of Development and Change, , vol. 25(2), pages 193-214, December.

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    More about this item

    Keywords

    Employment Programs; Targeting; Propensity Score Matching; Chile.;
    All these keywords.

    JEL classification:

    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm

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