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Compensation Mechanisms

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Combining Behavioral Endocrinology and Experimental Economics: Testosterone and Social Decision Making
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Does receiving an earnings supplement affect union formation? Estimating effects for program participants using

Kristen Harknett1

  • 1University of Pennsylvania, USA.

Evaluation Review
|November 10, 2006
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This study shows earnings supplements increased marital unions for low-income mothers in one Canadian province. The positive effects were strongest for disadvantaged participants, highlighting the value of propensity score matching in program evaluation.

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Area of Science:

  • Social Sciences
  • Economics
  • Sociology

Background:

  • Program evaluation often faces challenges with imperfect take-up rates in experimental designs.
  • Understanding factors influencing marital union formation among low-income mothers is crucial for social policy.
  • Canadian provinces have implemented various social assistance programs to support low-income families.

Purpose of the Study:

  • To demonstrate a novel application of propensity score matching (PSM) within an experimental design to estimate program impacts.
  • To examine the effect of an earnings supplement program on marital union formation among low-income mothers in two Canadian provinces.
  • To identify subgroups of participants who benefit most from the earnings supplement program.

Main Methods:

  • Utilized propensity score matching (PSM) techniques to analyze nonexperimental program impacts.
  • Employed an experimental research design with a program participation group (earnings supplement).
  • Conducted subgroup analysis based on propensity scores to explore differential program effects.

Main Results:

  • Receipt of the earnings supplement significantly increased marital union formation in one Canadian province.
  • No significant impact on union formation was observed in the second province.
  • Subgroup analysis indicated that the positive effect of the earnings supplement was concentrated among more disadvantaged participants.

Conclusions:

  • Propensity score matching is a valuable tool for estimating program impacts in experimental settings with less than 100% take-up.
  • Earnings supplement programs can influence marital union formation, with effects varying by context and participant characteristics.
  • Targeting support towards disadvantaged populations may maximize the positive social impacts of such programs.