Working Paper: NBER ID: w26035
Authors: Girum Abebe; Marcel Fafchamps; Michael Koelle; Simon Quinn
Abstract: What is the effect of exposing motivated youth to firm management in practice? To answer this question, we place young professionals for one month in established firms to shadow middle managers. Using random assignment into program participation, we find positive average effects on wage employment, but no average effect on the likelihood of self-employment. Within the treatment group, we match individuals and firms in batches using a deferred-acceptance algorithm. We show how this allows us to identify heterogeneous treatment effects by firm and intern. We find striking heterogeneity in self-employment effects, but almost no heterogeneity in wage employment. Estimates of marginal treatment effects (MTE) are then used to simulate counterfactual mechanism design. We find that some assignment mechanisms substantially outperform random matching in generating employment and income effects. These results demonstrate the importance of treatment heterogeneity for the design of field experiments and the role of matching algorithms in intervention design.
Keywords: Management; Field Experiment; Mechanism Design; Youth Employment
JEL Codes: J24; O15
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| management placement program (M10) | likelihood of obtaining a good permanent wage job (J31) |
| management placement program (M10) | hours and earnings in wage employment (J31) |
| management placement program (M10) | self-employment (L26) |
| management placement program (M10) | likelihood of having a wage job with managerial responsibilities (J31) |
| high-management firms (L22) | probability of self-employment (J23) |
| firm-proposing deferred acceptance algorithm (C78) | employment and income effects (J68) |