Disentangling Treatment Effects of Polish Active Labor Market Policies: Evidence from Matched Samples

This paper estimates causal effects of two Polish active labor market policies – Training and\nIntervention Works – on employment probabilities. Using data from the 18th wave of the\nPolish Labor Force Survey we discuss three stages of an appropriately designed matching\nprocedure and demonstrate how the method succeeds in balancing relevant covariates. The\nvalidity of this approach is illustrated using the estimated propensity score as a summary\nmeasure of balance. We implement a conditional difference-in-differences estimator of\ntreatment effects based on individual trinomial sequences of pre-treatment labor market\nstatus. Our findings suggest that Training raises employment probability, while Intervention\nWorks seems to lead to a negative treatment effect for men. Furthermore, we find that\nappropriate subdivision of the matched sample for conditional treatment effect estimation can\nadd considerable insight to the interpretation of results.