Double-Sided Randomization Design
RCTReview
Standard single-sided field experiments measure direct individual treatment effects but fail to detect market-level displacement or substitution effects. Evaluating net job creation requires simultaneously quantifying supply-side windfall participation and demand-side crowding-out of un-subsidized positions in firms.
Picture this
Imagine a musical chairs game where organizers want to know if giving subsidized tickets to new players adds total active players or merely pushes out un-subsidized participants. By flipping a coin to select both which players receive subsidized tickets and which chairs host subsidized players, organizers can directly observe whether new total chairs are created or existing participants are displaced.
What the evidence says
Placing 1.398 formal apprentices per firm displaced only 0.318 traditional apprentices, creating a net gain of 1.080 total apprentices per firm (p < 0.0001); net job creation was bounded between 74.1% and 77.3% of formal positions placed.
- Who was studied
- N = 731 informal firms (361 treatment, 370 control) offering apprenticeship positions, and 1,842 eligible youth (911 treatment, 921 control) across 7 localities in Côte d'Ivoire.
- How
- Double-sided randomized controlled trial (double randomization) assigning treatment independently across labor market supply (youths) and demand (firms).
What to do
Randomize program eligibility simultaneously on both the applicant supply side and firm demand side to identify substitution parameters and net macro-level employment impacts.
From the source
"To simultaneously measure direct effects among individuals and indirect (substitution) effects in firms, we set up a double-sided experiment. Specifically, we randomize whether interested youths were assigned to a formal apprenticeship, and whether apprenticeship positions opened by firms were filled with formal apprentices."
Direct_and_Indirect_Effects_of_Subsidized_Dual_Apprenticeships.pdf