Non-parametric Matching Approach Research Articles

Disentangling the Brexit vote: The role of economic, social and cultural contexts in explaining the UK’s EU referendum vote

A large number of studies have analysed the role of individual and geographical determinants of voting behaviour in the context of the recent EU referendum in the UK, but several questions remain. A key unresolved issue is the extent of the interaction between individual voter characteristics and the geographical context in which they live, with some of the variance in voter preferences previously attributed to individual characteristics potentially being mediated by the geographical context. Space, and the people who live in it, are in continuous interaction, which requires a careful conceptual and empirical treatment of the issues of composition and sorting. We therefore ask to what extent individuals with very similar individual characteristics voted differently in different places. We use data from the British Election Study, along with a non-parametric matching approach, to analyse whether comparable individuals voted differently in areas with particular economic and cultural characteristics. We find that composition effects account for less than half of the observed constituency-level variation in the vote, while the remaining contextual effects are driven almost entirely by cultural factors.

Disentangling the Brexit Vote: The Role of Economic, Social, and Cultural Contexts in Explaining the UK's EU Referendum Vote

A large number of studies have analysed the role of individual and geographical determinants of voting behaviour in the context of the recent EU referendum in the UK, but several questions remain. One key unresolved issue is the extent of interaction between individual voter characteristics and the geographical context in which they live. For instance, much of the variance in voter preferences that has been attributed to individual characteristics may have been mediated by the geographical context, and vice versa. Space, and the people who live in it, are in continuous interaction, which requires a careful conceptual and empirical treatment of the issues of composition and sorting. We therefore ask: to what extent did individuals with very similar individual characteristics vote differently in different places? We use data from the British Election Study, and a non-parametric matching approach, to analyse whether comparable individuals voted differently in areas with particular economic, social, and cultural characteristics. We find that composition effects account for less than half of the observed constituency-level variation in the vote, while the remaining contextual effects are driven almost entirely by cultural factors.

Ethnicity and gender in the labour market in Central and South-Eastern Europe

The Roma are both the largest ‘minority’ ethnic group in Central and South-Eastern Europe (CSEE) and the one that suffered most from transition to the market. Still today, nearly 40 years after the introduction of the European Union (EU) 1975 Discrimination Directive and with the end of the ‘Roma Decade’ (2005–15) in sight, people from the Roma minority have unemployment rates far above—and employment rates and wages far below—those of majority populations. One issue that has received relatively little attention concerns the ‘double’ discrimination facing Roma women. Not only do Roma women face poorer employment and wage outcomes in the labour market than non-Roma women, in most CSEE countries the gender earnings gap is significantly larger amongst Roma compared to non-Roma. This paper seeks to analyse and explain differences in the gender gap in the earnings of Roma. The paper employs a non-parametric matching approach to identify the main factors underlying the gender difference. Educational attainment plays a relatively small role, explaining only around one-fifth of the gap. Industrial and occupational segregation appear to be playing a strong role as do the civil status of individuals, household socio-economic status and whether or not individuals live in a predominantly Roma community.

The Consequences of Cumulative Discrimination: How Special Schooling Influences Employment and Wages of Roma in the Czech Republic

Unequal labour market outcomes between Roma and non-Roma have typically been explained by either the low level of educational attainment on the one hand or labour marked discrimination on the other — or both. A number of studies have found that significant labour market inequalities persist even after the low levels of educational attainment amongst Roma have been accounted for. This article looks at the role of special schooling in driving labour market inequalities between Roma and non-Roma in the Czech Republic. The article confirms the findings of other studies that Roma face significant differences in labour market outcomes which cannot be explained in terms of educational attainment. Moreover, the authors find that the discriminatory streaming of Roma into special remedial schools for the mentally disabled influences both labour market outcomes and the level of educational attainment; the latter effect being particularly strong. Special school attendance explains a small part of Roma labour market discrimination as typically measured, but its main impact is through lowering Roma educational attainment suggesting an additional discriminatory element in Roma and non-Roma labour market outcomes, which is more typically ascribed to ‘justified’ Roma and non-Roma educational differences. Thus, the authors propose that labour market inequality should not only be understood as a result of low attainment and labour market discrimination per se, but as a complex outcome of cumulative discrimination. In contrast to previous articles which take a parametric approach assuming common support between Roma and non-Roma, the non-parametric matching approach employed here explicitly takes into consideration the substantial differences in educational attainment observable between Roma and non-Roma.

Ethnicity and Gender in the Labour Market in Central and South East Europe

The Roma are both the largest 'minority' ethnic group in Central and South Eastern Europe and the one which suffered most from transition to the market. Still today, nearly forty years after the introduction of the EU's 1975 Discrimination Directive and with the end of the 'Roma Decade' (2005-15) in sight, people from the Roma minority have unemployment rates far above – and employment rates and wages far below – those of majority populations. One issue which has received relatively attention concerns the 'double' discrimination facing Roma women. Not only do Roma women face poorer employment and wage outcomes in the labour market than non-Roma women, in most CSEE countries the gender wage gap is significantly larger amongst Roma compared to non-Roma. This paper seeks to analyze and explain differences in the gender gap in the wages amongst Roma. The paper employs a non-parametric matching approach to identify the main factors underlying the gender wage gap. Educational attainment plays a relatively small role, explaining only around one-fifth of the gap. Industrial and occupational segregation appear to be playing a strong role as does the civil status of individuals, household socioeconomic status and whether individuals living in a predominantly Roma community.

A control group study of incubators’ impact to promote firm survival

It is widely unclear as to whether start-up firms supported by publicly-initiated incubator initiatives have higher survival rates than comparable start-up firms that have not received support by such initiatives. This paper contributes to the underlying discussion by performing a large-scale matched-pairs analysis of the long-term survival of 371 incubator firms (after their graduation) from five German incubators and a control group of 371 comparable non-incubated firms. The analysis covers a 10-year time span. To account for the problem of selection bias, a non-parametric matching approach is applied to identify an appropriate control group. For neither of the five incubator locations, we find statistically significant higher survival probabilities for firms located in incubators compared to firms located outside those incubator organizations. For three incubator locations the analysis reveals statistically significant lower chances of survival for those start-ups receiving support by an incubator. The empirical results, therefore, raise some doubts regarding the impacts of incubation on long-term firm survival.

Do Free Trade Agreements Increase Economic Growth of the Member Countries?

Summary This paper assesses whether a bilateral FTA raises the growth rates of the two countries engaging in the FTA. A nonparametric matching approach, which imposes no specific functional forms and can be applied to a broad range of data structures, is employed to estimate the FTA effect on the growth. We find that FTAs exert insignificant effects on aggregated growth from one to 10 year period after launch, but detect a significant upward trend in the gap between the growth rates of per capita GDP within a bilateral FTA. This implies uneven FTA effects across countries within an FTA.

Does "Sorting into Specialization" Explain the Differences in Time Use between Married and Cohabiting Couples? An Empirical Application for Germany

The aim of this paper is to identify the sources of time use differences between married and cohabiting couples. We want to answer the question whether there is a sorting into in marriage, i.e. whether cohabiting partners who intend a (traditional) division of work have a higher probability of getting married. In a non-parametric matching approach, we compare couples in the German Socio-Economic Panel who marry between 1991 and 2008 with couples who remain cohabiters. Taking the potential selection into marriage into account, differences in the intra-couple division of market work, housework and child care are reduced by up to 75 percent. We therefore conclude that couples who anticipate specialization in time use (and its economic advantages) pre-select into formal marriage. However, remaining differences in time use leave sufficient scope for an additional specialization-reinforcing effect of the institution of marriage in Germany, particularly for the subsample of couples who become parents.

Evaluating the impact of R&D tax credits on innovation: A microeconometric study on Canadian firms

This study examines the effect of R&D tax credits on innovation activities of Canadian manufacturing firms. Over the 1997–1999 period the Federal and Provincial R&D tax credit programs were used by more than one third of all manufacturing firms and by close to two thirds of firms in high-technology sectors. We investigate the average effect of R&D tax credits on a series of innovation indicators such as: number of new products, sales with new products, originality of innovation, etc. using a non-parametric matching approach. Compared to a hypothetical situation in the absence of R&D tax credits, recipients of tax credits show significantly better scores on most but not all performance indicators. We therefore conclude that tax credits lead to additional innovation output.

The Effect of Subsidies on R&D Investment and Success – Do Subsidy History and Size Matter?

This study provides insights into the effects of public R&D grants on R&D input and output of firms from Germany. Previous research has shown that the allocation of R&D project grants is rather stable regarding the pool of beneficiaries. The question is whether this participation pattern can be justified by its realized effects. In addition, the impact of the grant size on the effects is investigated. Therefore, I allow to a certain extent for heterogeneous treatment effects in these two dimensions. Using a sample of about 8,500 observations, a non-parametric matching approach with multiple treatments is applied to estimate the effects of public R&D grants on firm's R&D input. The results show that particularly frequently given grants as well as medium and large grants are suitable to increase the scope of firm-financed R&D plans. For the analysis of the effects on firm's R&D output the R&D expenditures are disentangled in R&D which would have been spent in the absence of the grant and publicly induced R&D, including the grant and the effect on private R&D expenditures. Basically both types of R&D are equally productive in terms of innovative output. For the statement that a rather stable pattern of program participation leads to a lower effectiveness of the instrument no evidence has been found.

The 'Shadow of Succession': A Non-Parametric Matching Approach

The paper analyses the relationship between succession and firm performance. Applying a non-parametric matching approach on a panel of roughly 4,000 Austrian family firms we evaluate the impact of past succession as well as future succession plans on employment growth. Analysing succession plans, we do not find a 'shadow of succession' effect. No significant difference in employment growth is found between firms that plan to transfer the firm in the next ten years and those who do not. In contrast, past succession exerts a significant and positive employment growth effect which becomes stronger over time. Thus, our findings provide support for the existence of a positive employment shadow after a transfer, whereas the shadow of succession hypothesis has to be rejected prior to transition. (author's abstract)

Succession and firm growth: results from a non-parametric matching approach

The article analyses the relationship between succession and firm performance. Applying a non-parametric matching approach on a panel of roughly 4,000 Austrian family firms we evaluate the impact of actual (past) succession as well as planned (future) successions on employment growth. Analysing succession plans, we do not find a significant difference in employment growth between firms that plan to transfer the firm in the next 10 years and those who do not. In contrast, past succession exerts a significant and positive employment growth effect, which becomes stronger over time.

The new deal for young people: effect on the labour market status of young men

The New Deal for Young People was introduced throughout Great Britain in April 1998 as a key element of the government's welfare-to-work strategy. Participants enter a period of intensive job search known as the ‘Gateway’ and then enter one of four options. In this paper, the relative effectiveness of these options on unemployment exit and job entry is evaluated. The evaluation uses a non-parametric matching approach and finds that the employment option dominates the other NDYP options. Remaining on the Gateway appears more effective than entering the remaining options. The relative strength of these effects changes over time.

Job creation through public start-up assistance?

This study examines the impact of German public start-up assistance programmes administered by the Deutsche Ausgleichsbank (DtA) on the performance of young firms. The empirical analysis is based on firms from the ZEW Entrepreneurship Study that either received start-up loans in one or more DtA schemes or did not receive any funding from the DtA at all. The paper applies a non-parametric matching approach often applied by labour market economists. The interesting success measure is the average annual employment growth rate over a six year period and the resulting causal effect is the difference of this measure between the group of subsidized firms and the selected control group firms that did not receive any DtA start-up loans. The empirical analysis shows that DtA start-up loans significantly improve the average employment growth rate.

The Shadow of Death – An Emperical Analysis of the Pre-Exit Performance of New German Firms

This paper makes an empirical contribution to the confirmation of the stylized fact that the performance of firms deteriorates in the years before exit. For this reason it is evaluated whether market exits differ significantly in their employment development in the years before market drop-out compared to surviving firms that have been selected using a non-parametric matching approach. The comparison of the employment growth rates among both groups reveals that the matched surviving firms experience higher growth rates compared to their exiting counterparts up to three years before market exit. Moreover, differences exist between Eastern and Western Germany due to various reasons.

Evaluating the Impact of R&D Tax Credits on Innovation: A Microeconometric Study on Canadian Firms

This study examines the effect of R&D tax credits on innovation activities of Canadian manufacturing firms. Over the 1997-1999 period the Federal and Provincial R&D tax credit programs were used by more than one third of all manufacturing firms and by close to two thirds of firms in high-technology sectors. We investigate the average effect of R&D tax credits on a series of innovation indicators such as number of new products, sales with new products, originality of innovation etc. using a non-parametric matching approach. Compared to a hypothetical situation in the absence of R&D tax credits, recipients of tax credits show significantly better scores on most but not all performance indicators. We therefore conclude that tax credits increase the R&D engagement at the firm level and that the R&D activities induced by fiscal incentives lead to additional innovation output.

The Shadow of Death: An Empirical Analysis of the Pre-Exit Performance of Young German Firms

This paper makes an empirical contribution to confirm the stylized fact that the performance of firms deteoriates in the years before exit. For this reason we evaluate whether market exits differ significantly in their employment development in the years before market drop-out compared to surviving firms that have been selected using a non-parametric matching approach. The matching approach allows to find a surviving firm for every market exit that does not differ in important characteristics measured at start-up. The comparison of the employment growth rates among the thus formed groups reveals that the matched surviving firms experience higher growth rates compared to their exiting counterparts up to three years before market exit. Moreover, we find support for the phenomenon called shadow of death sneaking around the corner. A considerable number of firms exiting from 1995 until 1998 has experienced continuing employment losses or at least an employment stagnation over several years before market exit.

The Effects of Public R&D Subsidies on Firms' Innovation Activities

This study analyzes the effects of public R&D policy schemes on the innovation activities of firms in Eastern Germany. The main question in this context is whether public funds stimulate R&D activities or simply crowd out privately financed R&D. Empirically, we investigate the average causal effects of all public R&D schemes in Eastern Germany using a nonparametric matching approach. Compared to the case in which no public financial means are provided, it turns out that firms increase their innovation activities by about four percentage points.

Evaluation of Swedish Youth Labor Market Programs

This paper evaluates two Swedish active labour market programmes for youth, namely youth practice and labour market training. A non-parametric matching approach is applied to estimate the average p ...