Our research on 500+ during WIEM 2021 conference
Annual WIEM at University of Warsaw is a wonderful opportunity for young scholars to exchange their PhD ideas. I presented my recent results on evaluating the effects of introducing the program Rodzina 500 Plus - a nearly universal child benefit program - on female labor supply. Large scale government interventions affect economic outcomes through different channels of various magnitude and direction of the effects. In order to account for this feature, I develop a model in which a woman decides whether to participate in the labor market in a given period. I show how to use the resulting decision rules to explain flows in aggregate labor supply and simulate counterfactual paths of labor force participation. My framework combines flexibility of reduced form approaches with an appealing structure of dynamic discrete choice models. The model is estimated nonparametrically using recent advances in machine learning methods. The results indicate a 2-4 percentage points drop in labor force among the eligible females, mainly driven by changes in women's perceived trade-offs and beliefs that discouraged inflows.