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Structural Estimation and Policy Evaluation in Developing Countries

Author

Listed:
  • Petra E. Todd
  • Kenneth I. Wolpin

    (Department of Economics, University of Pennsylvania, Philadelphia, Pennsylvania 19104)

Abstract

This review discusses the use of discrete choice dynamic programming (DCDP) methods for evaluating policies of particular relevance to developing countries, such as policies to reduce child labor and increase school attendance, improve school quality, affect immigration flows, expand old-age pension benefits, or foster small-business investment through microfinance. We describe the DCDP framework and how it relates to static models, illustrate its application with an example related to conditional cash transfer programs, consider numerous empirical applications from the literature of how the DCDP methodology has been used to address substantively important policy issues, and discuss methods for model validation.

Suggested Citation

  • Petra E. Todd & Kenneth I. Wolpin, 2010. "Structural Estimation and Policy Evaluation in Developing Countries," Annual Review of Economics, Annual Reviews, vol. 2(1), pages 21-50, September.
  • Handle: RePEc:anr:reveco:v:2:y:2010:p:21-50
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    File URL: http://www.annualreviews.org/doi/abs/10.1146/annurev.economics.102308.124345
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    6. Hugo Reis, 2020. "Girls' Schooling Choices And Home Production: Evidence From Pakistan," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 61(2), pages 783-819, May.
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    10. Rojas Valdes, Ruben I. & Lin Lawell, C.-Y. Cynthia & Taylor, J. Edward, 2017. "The Dynamic Migration Game: A Structural Econometric Model and Application to Rural Mexico," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 259184, Agricultural and Applied Economics Association.
    11. Yu Zheng & Juan Pantano, 2012. "Using Subjective Expectations Data to Allow for Unobserved Heterogeneity in Hotz-Miller Estimation Strategies," 2012 Meeting Papers 940, Society for Economic Dynamics.
    12. Matthieu Chemin & Etienne Wasmer, 2021. "Ex-ante and ex-post evaluation of the 1989 French welfare reform using a natural experiment : the 1908 social laws in Alsace-Moselle," Working Papers hal-03234843, HAL.
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    More about this item

    Keywords

    development economics; dynamic discrete choice models; schooling; migration;
    All these keywords.

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • I20 - Health, Education, and Welfare - - Education - - - General
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J82 - Labor and Demographic Economics - - Labor Standards - - - Labor Force Composition
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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