Evaluation of the Australian Wage Subsidy Special Youth ...

17
Vella (1998), Heckman, Lalonde and Smith (1999), Blundell and Costa Dias (2000),
Smith (2000). The aim here is to provide a brief introduction to the issues.
1.3.1 Evaluation of programs
Evaluation of the program can focus on the microeconomic level, or on the
macroeconomic level. A microeconomic evaluation can look at the effect of the program
upon the individual who has participated, such as whether they are in employment. A
macroeconomic evaluation can examine the effect the program has on the economy as a
whole, such as employment levels in the economy. In this thesis, only microeconomic
evaluation is attempted. Substitution effects, and other indirect effects of the program,
cannot be measured in microeconomic evaluation of program participants but only in a
macroeconomic evaluation. However, demonstrating in a microeconomic evaluation
whether the program has improved the employment of the targeted individuals is a
necessary condition for establishing the potential for macroeconomic effects.
Bryant (1978) succinctly introduces program evaluation, and the underlying concept that
programs should be evaluated on the basis of participant outcomes. The principal
evaluation question is stated as:
“To what extent are the participants better off… as a result of participation
than they would have been if there had been no such program.” (Bryant
(1978): 44).
In a microeconomic evaluation, participation is equated to the direct outcome of the
program and non-participation equated to the outcome of the ‘no program’ state
(Heckman, Lalonde and Smith (1999): 1880). The most difficult problem facing the
evaluator is the problem of attribution. Experimental design can assist in attributing cause
and effect, using randomisation of treatment and control status. Bryant (1978) however
cautions that even in evaluations using experimental designs, there can be restrictions on
the generality of results and gives examples where this can arise due to the need to obtain
voluntary cooperation, the artificiality of the treatment in a differently organized system