Evaluating the 500+ child support program in Poland

We investigate immediate effects of a large scale child benefit program introduction on labor supply of the household members in Poland. Due to nonrandom eligibility and universal character of the program standard evaluation estimators are likely to be inconsistent. In order to address this issues we propose a novel approach which combines difference-in-difference (DID) propensity score based methods with covariate balancing propensity score (CBPS) by Imai and Ratkovic (2014). The DID part solves potential problems with non-parallel outcome dynamics in treated and non-treated subpopulations resulting from non-experimental character of the data, whereas CBPS is expected to reduce significantly bias from the systematic differences between treated and untreated subpopulations. We account also for potential heterogeneity among households by estimating a range of local average treatment effects which jointly provide a reliable view on the overall impact. We found that the program has a minor impact on the labor supply in periods following its introduction. There is an evidence for a small encouraging effect on hours worked by treated mothers of children at school age, both sole and married. Additionally, the program may influence the intra-household division of duties among parents of the youngest children as suggested by simultaneous slight decline in participating mothers' probability of working and a small increase in treated fathers' hours worked.