Question

Cash to find work? (5.2) Will cash bonuses speed the return to work of unemployed people? The Illinois Department of Employment Security designed an experiment to find out. The subjects were 10,065 people aged 20 to 54 who were filing claims for

unemployment insurance. Some were offered \(500 if they found a job within 11 weeks and held it for at least 4 months. Others could tell potential employers that the state would pay the employer \)500 for hiring them. A control group got neither kind of bonus.

(a) Describe a completely randomized design for this experiment.

(b) How will you label the subjects for random assignment? Use Table D at line 127 to choose the first 3 subjects for the first treatment.

(c) Explain the purpose of a control group in this setting.

Short answer

a. People by hearing about the bonus of 500 US dollar news had purposely resigned and filed for unemployment.

b. The 3 subjects may have the employment, unemployment and paid by offers of $500

c. The control group got bonus in subjects for 1062 peoples.

Step-by-step solution

Given information

The subjects were 10,065 people aged 20 to 54 who were filing claims for

unemployment insurance.

Some were offered $500 if they found a job within 11 weeks and held it for at least 4 months.

Others could tell potential employers that the state would pay the employer $500 for hiring them.

A control group got neither kind of bonus.

Explanation (part a)

The flaw in the design was basically no restrictions for people who deliberately resign from their companies to get bonuses.If one needy person after struggle get employment he might not risk his job for 500 US dollars.

In the mean while people with experience and currently working in the different companies resigned from their jobs,filling unemployment claims to get bonus and due to experience as well as restoring their jobs easily.So percent Increase is only because of those people who want to earn a bonus.

Explanation (part b)

we label the subjects for random assignments for 3 subjects. They are unemployment, offered the amount $500, potential employers paid by $500.

Use Table D at line 127 to choose the first 3 subjects for the first treatment. The 3 subjects may have the employment, unemployment and paid by offers of $500

Explanation (part c)

A control group is a statistically significant portion of participants in an experiment that are shielded from exposure to variables. The control group got bonus in subjects for 1062 peoples.