The National Supported Work Demonstration (NSW) program included a randomized experiment evaluating the effect of an employment and training program. The program mplemented a concept called graduated stress, providing work experiences in which job stress was gradually increased throughout the training program up to the point where job stress resembled the "normal" stress of private-sector employment. At that point, which was at most 18 months after entry into the program, individuals receiving NSW program training were required to seek unsubsidized employment. The NSW program limited participation to individuals deemed to be the most seriously handicapped in the labor market. After meeting these criteria and being referred into the NSW program, individuals were randomly assigned to treatment and control groups. Treated individuals participated in the NSW program and received the graduated stress training, while controls only received services from other available social programs. We will consider a subset of males who were randomized to treatment or control after December 1975 and who had left the program before January 1978, with annual earnings recorded in 1974, 1975, and 1978. Because of these requirements, earnings in 1974 and 1975 are pretreatment covariates unaffected by the NSW program, and earnings in 1978 is an outcome that may be affected by treatment. Furthermore, to emphasize

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The National Supported Work Demonstration (NSW) program included a randomized experiment evaluating the
effect of an employment and training program. The program implemented a concept called graduated stress,
providing work experiences in which job stress was gradually increased throughout the training program up to
the point where job stress resembled the "normal" stress of private-sector employment. At that point, which
was at most 18 months after entry into the program, individuals receiving NSW program training were required
to seek unsubsidized employment.
The NSW program limited participation to individuals deemed to be the most seriously handicapped in the
labor market. After meeting these criteria and being referred into the NSW program, individuals were randomly
assigned to treatment and control groups. Treated individuals participated in the NSW program and received
the graduated stress training, while controls only received services from other available social programs.
We will consider a subset of males who were randomized to treatment or control after December 1975 and
who had left the program before January 1978, with annual earnings recorded in 1974, 1975, and 1978.
Because of these requirements, earnings in 1974 and 1975 are pretreatment covariates unaffected by the NSw
program, and earnings in 1978 is an outcome that may be affected by treatment. Furthermore, to emphasize
the parallel with matched observational studies, the randomized treated and control groups were matched.
Below is a subset of data (altered from the original study) from 4 matched pairs, sampled at random from the
185 pairs in the subset of males described above. The variables re74, re75, and re78 are earnings in dollars in
1974, 1975, and 1978. For each pair i, Y; = (Zi1 – Z;2) (Ra – i2) for is the treated-minus-control
matched pair difference in 1978 earnings.
(Note: you may need to adjust your zoom settings in your browser to see the entire table.)
treat
age
edu
black
hisp
married
nodegree
re74
re75
re78
Zij
Rij
Yobs
i
Xijl
Tij2
Tij3
Tija
Tij7
Tijs
1
1
17
8
1
1
1324
-2862
2
18
7
1
1
4186
1
1
25
6
1
7195
5095
2
24
7
2100
3
1
1
26
12
1
-60
2
26
12
1
1
60
4
1
1
29
10
1
1
2394
3661
-2442
2
23
10
1
1
1875
6103
a). Suppose the individuals in pair i = 1 were brothers who lived in the same household. What assumption is
most likely violated in this situation?
Treatment is randomly assigned within matched pairs
O Balance among observed covariates
Sufficient overlap in the covariate distribution of treated and control units
O Stable unit treatment value
O Ignorability / unconfoundedness
Transcribed Image Text:The National Supported Work Demonstration (NSW) program included a randomized experiment evaluating the effect of an employment and training program. The program implemented a concept called graduated stress, providing work experiences in which job stress was gradually increased throughout the training program up to the point where job stress resembled the "normal" stress of private-sector employment. At that point, which was at most 18 months after entry into the program, individuals receiving NSW program training were required to seek unsubsidized employment. The NSW program limited participation to individuals deemed to be the most seriously handicapped in the labor market. After meeting these criteria and being referred into the NSW program, individuals were randomly assigned to treatment and control groups. Treated individuals participated in the NSW program and received the graduated stress training, while controls only received services from other available social programs. We will consider a subset of males who were randomized to treatment or control after December 1975 and who had left the program before January 1978, with annual earnings recorded in 1974, 1975, and 1978. Because of these requirements, earnings in 1974 and 1975 are pretreatment covariates unaffected by the NSw program, and earnings in 1978 is an outcome that may be affected by treatment. Furthermore, to emphasize the parallel with matched observational studies, the randomized treated and control groups were matched. Below is a subset of data (altered from the original study) from 4 matched pairs, sampled at random from the 185 pairs in the subset of males described above. The variables re74, re75, and re78 are earnings in dollars in 1974, 1975, and 1978. For each pair i, Y; = (Zi1 – Z;2) (Ra – i2) for is the treated-minus-control matched pair difference in 1978 earnings. (Note: you may need to adjust your zoom settings in your browser to see the entire table.) treat age edu black hisp married nodegree re74 re75 re78 Zij Rij Yobs i Xijl Tij2 Tij3 Tija Tij7 Tijs 1 1 17 8 1 1 1324 -2862 2 18 7 1 1 4186 1 1 25 6 1 7195 5095 2 24 7 2100 3 1 1 26 12 1 -60 2 26 12 1 1 60 4 1 1 29 10 1 1 2394 3661 -2442 2 23 10 1 1 1875 6103 a). Suppose the individuals in pair i = 1 were brothers who lived in the same household. What assumption is most likely violated in this situation? Treatment is randomly assigned within matched pairs O Balance among observed covariates Sufficient overlap in the covariate distribution of treated and control units O Stable unit treatment value O Ignorability / unconfoundedness
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