Evaluation of the Australian Wage Subsidy Special Youth ...

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maintained, then the Heckman bivariate probit modelling results give a modelling result
in harmony with the role of unobservables in SYETP participation. But while this may be
true, the form which the unobservables take is also highly restricted in the Heckman
bivariate probit modelling, and the reasonableness of this must in turn be considered.
Rosenbaum and Rubin (1985b) p 109 also note that the assumption of strongly ignorable
treatment (CIA) needs to be consistent with the data and the causal mechanism, through
which the SYETP treatment is thought to operate to produce employment effects, and
without which the matching results are biased. CEP referrals is questioned as potentially
violating the CIA requirements, because of the use of this variable for the exclusion in
Richardson (1998). 166 It was argued earlier that CEP referrals credibly did not affect
employment independently once SYETP participation was accounted for. The effects of
the CEP referrals for the replicated Heckman modelling in the same data have been
shown to be strongly diminished by accounting for attrition with weighting. The
theoretical view against the inclusion of CEP referrals in the weighted model for the
propensity can however also be argued on the basis of the evidence of Wielgosz (1984)
and Aungles and Stewart (1986), discussed in section 2.2.6. If this conviction is upheld,
then the sensitivity results where CEP referrals are excluded, or the reduced specification,
provide matching results consistent with this view.
In conclusion, the sensitivity analysis shows that the employment effects found are
subject to the specifications and modelling assumptions adopted. This was true for both
the Heckman and PSM modelling approaches. In an overview of the various results
gained which disregards the magnitude of point estimates, it can be determined that no
negative employment effects were found for SYETP, even in sensitivity analysis.
Friedlander et al. (1997) p1819 note that in debates about non-experimental evaluations
there is no clear-cut way of determining which modelling assumption is valid. Within the
range of alternatives explored, and as can be determined within the limits of the ALS data,
the direction of employment effect is robustly positive. Statistical significance in this
166 This was checked by modelling the univariate probit for employment, where these variables were not
found significant.