Semi-parametric estimation of program impacts on dispersion of potential wages

Published

Journal Article

© 2013 John Wiley & Sons, Ltd. We propose the use of instrumental variables and pairwise matching to identify the average treatment effect on variance in potential outcomes. We show that identifying and estimating program impact on dispersion of potential outcomes in an endogenous-switching model is possible, without using the identification-at-infinity argument, if we impose semi-parametric conditions or shape restrictions on the error structure. In the presence of a multi-valued or continuously distributed instrument, we recommend the pairwise-matching method under a set of symmetry conditions. Simulations and an empirical example show that the matching method is much more precise than the instrumental-variable approach.

Full Text

Cited Authors

  • Chen, SH; Khan, S

Published Date

  • January 1, 2014

Published In

Volume / Issue

  • 29 / 6

Start / End Page

  • 901 - 919

Electronic International Standard Serial Number (EISSN)

  • 1099-1255

International Standard Serial Number (ISSN)

  • 0883-7252

Digital Object Identifier (DOI)

  • 10.1002/jae.2351

Citation Source

  • Scopus