How Impact Evaluation Is Sha** the Design of Labour Market Policies

Abstract

Support for evidence-based policy making and the microeconometric evaluation methods necessary to uncover causal effects has grown during the last two decades. Today, there is a growing appetite for credible and transparent evidence on whether a policy intervention achieves its expected outcomes. While data and methodological innovations have driven progress in the field of impact evaluation, progress has also been facilitated by a growing institutional commitment to evaluation in many countries. Despite this progress, no agreement has yet been reached in policy circles as to whether high standards of rigour in impact evaluation are needed in all situations. This is in part why the support for evidence-based policy making is not equally widespread in policy settings than in academic circles. This short article discusses this question. First, it reviews the progress achieved thus far in the impact evaluation literature, with a focus on labour economics. Then, it examines the obstacles that the impact evaluation profession needs to overcome to achieve an even wider use of evaluation techniques that continues sha** the design of labour market policies. I focus on the two biggest challenges that I have observed when discussing the implementation of impact evaluations with policy makers: impact evaluation is hard to implement—data and techniques are not accessible to everyone, and their implementation is time-consuming and often costly. More importantly, it is not always clear to policy makers how to use the results of impact evaluations, making their benefits less evident.

I am grateful to Hilary Hoynes, Miguel Ángel Malo, Domenico Tabasso and the editors of this book for their comments.