The paper analyzes the impact of a workfare program by studying income replacement for those observed to leave the program after its contraction. The incomes of continuing participants in a workforce program in Argentina are compared to those of a matched comparison group of non-participants and with a matched group of past participants who leave the program. The evaluation approach combines triple differencing with propensity score matching. The authors estimate partal income replacement amounting to one-quarter of the gross workfare wage within six months of leaving the program, rising to one half in twelve months. The estimates are unbiased in the presence of time-invariant errors due to mis-matching. Fully removing selection bias would probably yield lower income replacement. Test reults based on a second follow-up survey suggest that valid inferences can be drawn about program impacts from the authors' measures of income employment.
Bibliography: Ravallion, Martin et al. 2001. "Do Workfare Participants Recover Quickly from Retrenchment?" World Bank, Washington, DC.
