Learning Management Through Matching: A Field Experiment Using Mechanism Design

We place young professionals into established firms to shadow middle managers. Using random assignment into program participation, we find positive average effects on wage employment, but no average effect on the likelihood of self-employment. We match individuals to firms using a deferred-acceptance algorithm, and show how this allows us to identify heterogeneous treatment effects by firm and intern characteristics. We find striking heterogeneity in self-employment effects, and show that some assignment mechanisms can substantially outperform random matching in generating employment and income effects. These results demonstrate the potential for matching algorithms to improve the design of field experiments.

[1]  N. Bloom,et al.  The Land that Lean Manufacturing Forgot? Management Practices in Transition Countries , 2011 .

[2]  Atila Abdulkadiroglu,et al.  Research Design Meets Market Design: Using Centralized Assignment for Impact Evaluation , 2015, SSRN Electronic Journal.

[3]  Glenn Ellison,et al.  A Theory of Rule Development , 2014 .

[4]  D. Rubin,et al.  The central role of the propensity score in observational studies for causal effects , 1983 .

[5]  Paola Sapienza,et al.  The Value of Corporate Culture , 2013 .

[6]  J. List,et al.  The Impact of Management Practices on Employee Productivity: A Field Experiment with Airline Captains , 2019, Journal of Political Economy.

[7]  David Atkin,et al.  Organizational Barriers to Technology Adoption: Evidence from Soccer-Ball Producers in Pakistan , 2015, SSRN Electronic Journal.

[8]  N. Thomas,et al.  Cash for carbon: A randomized trial of payments for ecosystem services to reduce deforestation , 2017, Science.

[9]  Steven Klepper,et al.  Entry by Spinoffs , 2005, Manag. Sci..

[10]  David McKenzie,et al.  Business Practices in Small Firms in Developing Countries , 2015, Manag. Sci..

[11]  Y. Benjamini,et al.  Adaptive linear step-up procedures that control the false discovery rate , 2006 .

[12]  Edward Vytlacil,et al.  Estimating Marginal Returns to Education , 2010, The American economic review.

[13]  O. Bandiera,et al.  Matching firms, managers and incentives , 2015 .

[14]  Dean S. Karlan,et al.  The Impact of Consulting Services on Small and Medium Enterprises: Evidence from a Randomized Trial in Mexico , 2012, Journal of Political Economy.

[15]  James E. Rauch,et al.  Do Employee Spinoffs Learn Markets from Their Parents? Evidence from International Trade , 2018, European Economic Review.

[16]  P. McCullagh Estimating the Number of Unseen Species: How Many Words did Shakespeare Know? , 2008 .

[17]  J. Humphries The Causes and Consequences of Self-Employment over the Life Cycle , 2017 .

[18]  Susan Athey,et al.  When Should You Adjust Standard Errors for Clustering? , 2017, The Quarterly Journal of Economics.

[19]  S. Franklin Location, Search Costs and Youth Unemployment: Experimental Evidence from Transport Subsidies , 2016 .

[20]  J. Heckman,et al.  Policy-Relevant Treatment Effects , 2001 .

[21]  James J. Heckman,et al.  Econometric Evaluation of Social Programs, Part II: Using the Marginal Treatment Effect to Organize Alternative Econometric Estimators to Evaluate Social Programs, and to Forecast their Effects in New Environments , 2007 .

[22]  Morten Sorensen,et al.  Which CEO Characteristics and Abilities Matter? , 2008 .

[23]  Andrea Prat,et al.  CEO Behavior and Firm Performance , 2017, Journal of Political Economy.

[24]  Alexander Teytelboym,et al.  Placement Optimization in Refugee Resettlement , 2021, Oper. Res..

[25]  Terence R. Johnson,et al.  Mentors or Teachers? Microenterprise Training in Kenya , 2018, American Economic Journal: Applied Economics.

[26]  Ulrike Malmendier,et al.  Overconfidence and Early-Life Experiences: The Impact of Managerial Traits on Corporate Financial Policies , 2010 .

[27]  John Van Reenen,et al.  The New Empirical Economics of Management , 2014 .

[28]  C. Frydman,et al.  Military CEOS , 2014 .

[29]  Peter J. Klenow,et al.  Misallocation and Manufacturing TFP in China and India , 2007 .

[30]  L. S. Shapley,et al.  College Admissions and the Stability of Marriage , 2013, Am. Math. Mon..

[31]  Antoinette Schoar,et al.  Managing with Style: The Effect of Managers on Firm Policies , 2003 .

[32]  L. B. Wilson,et al.  Stable marriage assignment for unequal sets , 1970 .

[33]  Benjamin N. Roth,et al.  Targeting High Ability Entrepreneurs Using Community Information: Mechanism Design in the Field , 2022, American Economic Review.

[34]  Jörg Drechsler,et al.  Multiple Imputation for Nonresponse , 2011 .

[35]  Alvin E. Roth,et al.  Two-Sided Matching: A Study in Game-Theoretic Modeling and Analysis , 1990 .

[36]  Atila Abdulkadiroglu,et al.  RANDOM SERIAL DICTATORSHIP AND THE CORE FROM RANDOM ENDOWMENTS IN HOUSE ALLOCATION PROBLEMS , 1998 .

[37]  Stefano DellaVigna,et al.  Predicting Experimental Results: Who Knows What? , 2016, Journal of Political Economy.

[38]  A. Roth The Evolution of the Labor Market for Medical Interns and Residents: A Case Study in Game Theory , 1984, Journal of Political Economy.

[39]  Emily Breza,et al.  Social Networks, Reputation and Commitment: Evidence from a Savings Monitors Experiment , 2015, Econometrica.

[40]  M. Fafchamps,et al.  Anonymity or Distance? Job Search and Labour Market Exclusion in a Growing African City , 2018, The Review of Economic Studies.