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Unobservable, but Unimportant? The Influence of Personality Traits (and Other Usually Unobserved Variables) for the Estimation of Treatment Effects

Author

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  • Caliendo, Marco
  • Mahlstedt, Robert
  • Mitnik, Oscar
Abstract
A large and highly used number of treatment effects estimators rely on the unconfoundedness assumption ("selection on observables") which is fundamentally non testable. When evaluating the effects of labor market policies, researchers need to observe both variables that affect treatment participation and labor market outcomes. Even though many countries now offer access to (very) informative administrative data concerns about the validity of the unconfoundedness assumption remain. The main concern is that the observable characteristics of the individuals may not be enough to properly address potential selection bias. This is especially relevant in light of the research about the influence of personality traits on economic outcomes. We exploit a unique dataset that contains a rich set of administrative information of individuals entering unemployment in Germany, as well as several usually not observed characteristics like personality traits, attitudes, expectations, and job search behavior. This allows us to empirically assess how estimators based on the unconfoundedness assumption perform when alternatively including or not these usually not observed variables. Our results suggest that these variables, which appear as relevant for the participation probabilities, do not matter for the estimation of effects of the programs evaluated.

Suggested Citation

  • Caliendo, Marco & Mahlstedt, Robert & Mitnik, Oscar, 2014. "Unobservable, but Unimportant? The Influence of Personality Traits (and Other Usually Unobserved Variables) for the Estimation of Treatment Effects," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100502, Verein für Socialpolitik / German Economic Association.
    • Handle: RePEc:zbw:vfsc14:100502
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    References listed on IDEAS

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    2. Steffen Künn, 2015. "The challenges of linking survey and administrative data," IZA World of Labor, Institute of Labor Economics (IZA), pages 214-214, December.
    3. Boockmann Bernhard & Brändle Tobias, 2019. "Coaching, Counseling, Case-Working: Do They Help the Older Unemployed Out of Benefit Receipt and Back Into the Labor Market?," German Economic Review, De Gruyter, vol. 20(4), pages 436-468, December.
    4. Caliendo, Marco & Künn, Steffen & Weißenberger, Martin, 2016. "Personality traits and the evaluation of start-up subsidies," European Economic Review, Elsevier, vol. 86(C), pages 87-108.
    5. Hagen, Tobias, 2016. "Econometric evaluation of a placement coaching program for recipients of disability insurance benefits in Switzerland," Working Paper Series 10, Frankfurt University of Applied Sciences, Faculty of Business and Law.
    6. Katharina Dengler, 2019. "Effectiveness of sequences of classroom training for welfare recipients: what works best in West Germany?," Applied Economics, Taylor & Francis Journals, vol. 51(1), pages 1-46, January.
    7. Dauth, Christine & Lang, Julia, 2017. "Should the unemployed care for the elderly? : The effect of subsidized occupational and further training in elderly care," IAB-Discussion Paper 201713, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    8. Lang, Julia & Dauth, Christine, 2017. "Should the unemployed care for the elderly? The effect of subsidized occupational and further training in geriatric care," VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168130, Verein für Socialpolitik / German Economic Association.
    9. Dauth, Christine, 2016. "Do low-skilled employed workers benefit from further training subsidies?," VfS Annual Conference 2016 (Augsburg): Demographic Change 145533, Verein für Socialpolitik / German Economic Association.
    10. Hagen, Tobias, 2016. "Econometric Evaluation of a Placement Coaching Program for Recipients of Disability Insurance Benefits in Switzerland," VfS Annual Conference 2016 (Augsburg): Demographic Change 145736, Verein für Socialpolitik / German Economic Association.
    11. Christine Dauth & Ott Toomet, 2016. "On Government-Subsidized Training Programs for Older Workers," LABOUR, CEIS, vol. 30(4), pages 371-392, December.

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    More about this item

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles

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