Evaluation of the Australian Wage Subsidy Special Youth ...

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might give an approximation measure of the functioning of the administration is CES
referrals, and also CEP referrals which have been used in analysis.
In this analysis, age and referrals to CEP might be the key variables under suspicion for
violating the CIA rule for PSM. This is because their use for the exclusion in Richardson
(1998) 94 was argued as due to their plausibly not affecting employment independently
once SYETP participation was accounted for. Indeed, in later checks carried out in this
study it was not possible to estimate the Heckman model if these variables were included
in the employment equation which might indicate misspecification. In later chapter 7, the
sensitivity of the PSM specification to CEP referrals is checked.
Furthermore, in the application of both methods, casewise deletion was used for missing
data (item non-response) on modelled variables. This may not be the most suitable
treatment for missing data, as briefly discussed in the next chapter. However, as later
discussion shows, casewise deletion is preferable because it assumes the correct standard
error. As well, in light of the replication aims, it was necessary to repeat the modelling
assumptions of Richardson (1998).
However, at least one strong confounding factor to discussion comparing the results is the
issue of non-response to the surveys. The issue of attrition can introduce selection bias
which would confound both Heckman and PSM methods unless it was treated. As a
result, further comparison of the results is deferred. This comparison is then again treated
in later chapters after consideration of the data problems and repairing the data to treat
them.
94 This was checked by modelling the univariate probit for employment, where these variables were not
found to be statistically significant when included.