Evaluating Search and Matching Models Using Experimental Data

This paper introduces an innovative test of search and matching models using the exogenous variation available in experimental data. We take an off-the-shelf Pissarides matching model and calibrate it to data on the control group from a randomized social experiment. We then simulate a program group from a randomized experiment within the model. As a measure of the performance of the model, we compare the outcomes of the program groups from the model and from the randomized experiment. We illustrate our methodology using the Canadian Self-Sufficiency Project (SSP), a social experiment providing a time limited earnings supplement for Income Assistance recipients who obtain full time employment within a 12 month period. We find two features of the model are consistent with the experimental results: endogenous search intensity and exogenous job destruction. We find mixed evidence in support of the assumption of fixed hours of labor supply. Finally, we find a constant job destruction rate is not consistent with the experimental data in this context.Calibration, equilibrium search and matching models, policy experiments, Self-Sufficiency Project, welfare, social experiments

Equilibrium Policy Experiments and the Evaluation of Social Programs

This paper makes three contributions to the literature on program evaluation. First, we construct a model that is well-suited to conduct equilibrium policy experiments and we illustrate effectiveness of general equilibrium models as tools for the evaluation of social programs. Second, we demonstrate the usefulness of social experiments as tools to evaluate models. In this respect, our paper serves as the equilibrium analogue to LaLonde (1986) and others, where experiments are used as a benchmark against which to assess the performance of non-experimental estimators. Third, we apply our model to the study of the Canadian Self-Sufficiency Project (SSP), an experiment providing generous financial incentives to exit welfare and obtain stable employment. The model incorporates the main features of many unemployment insurance and welfare programs, including eligibility criteria and time-limited benefits, as well as the wage determination process. We first calibrate our model to data on the control group and simulate the experiment within the model. The model matches the welfare-to-work transition of the treatment group, providing support for our model in this context. We then undertake an equilibrium evaluation of the SSP. Our results highlight important feedback effects of the policy change, including displacement of unemployed individuals, lower wages for workers receiving supplement payments and higher wages for those not directly treated by the program. The results also highlight the incentives of individuals to delay exit from welfare in order to qualify for the program. Together, the feedback effects change the cost-benefit conclusions implied by the partial equilibrium experimental evaluation substantially.Program Evaluation, Self-Suficiency Project, Welfare, Social Experiments, Equilibrium Models

Navigating Indonesia-United States relations, 1967-1969

Individuals not holding formal positions are often overlooked in studies of international relations, where the focus is generally on Heads of State, foreign ministers and accredited professionals attached to diplomatic services. Indeed, it is an anomaly for an individual, and certainly a non-national, to act as an envoy for one government, and for that intermediary to be attached great importance by another foreign government. Such an abnormality was Clive Williams, President Soeharto of Indonesia’s Australian Whisperer. Williams has never been mentioned in a single diplomatic, political or historical account of United States-Indonesia relations. But as shall be seen, he was an extremely effective and indispensable intermediary for both countries as they moved towards closer relations in the late 1960s. The practice of a non-national assisting a national leader in international affairs is a fascinating concept

Degenerate Quantum Codes for Pauli Channels

A striking feature of quantum error correcting codes is that they can sometimes be used to correct more errors than they can uniquely identify. Such degenerate codes have long been known, but have remained poorly understood. We provide a heuristic for designing degenerate quantum codes for high noise rates, which is applied to generate codes that can be used to communicate over almost any Pauli channel at rates that are impossible for a nondegenerate code. The gap between nondegenerate and degenerate code performance is quite large, in contrast to the tiny magnitude of the only previous demonstration of this effect. We also identify a channel for which none of our codes outperform the best nondegenerate code and show that it is nevertheless quite unlike any channel for which nondegenerate codes are known to be optimal.Comment: Introduction changed to give more motivation and background. Figure 1 replace

Entanglement can completely defeat quantum noise

We describe two quantum channels that individually cannot send any information, even classical, without some chance of decoding error. But together a single use of each channel can send quantum information perfectly reliably. This proves that the zero-error classical capacity exhibits superactivation, the extreme form of the superadditivity phenomenon in which entangled inputs allow communication over zero capacity channels. But our result is stronger still, as it even allows zero-error quantum communication when the two channels are combined. Thus our result shows a new remarkable way in which entanglement across two systems can be used to resist noise, in this case perfectly. We also show a new form of superactivation by entanglement shared between sender and receiver.Comment: 4 pages, 1 figur

The classical capacity of quantum thermal noise channels to within 1.45 bits

We find a tight upper bound for the classical capacity of quantum thermal noise channels that is within $1/\ln 2$ bits of Holevo's lower bound. This lower bound is achievable using unentangled, classical signal states, namely displaced coherent states. Thus, we find that while quantum tricks might offer benefits, when it comes to classical communication they can only help a bit.Comment: Two pages plus a bi