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Local Instruments, Global Extrapolation: External Validity of the Labor Supply-Fertility Local Average Treatment Effect

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  • James Bisbee
  • Rajeev Dehejia
  • Cristian Pop-Eleches
  • Cyrus Samii

Abstract

We investigate the external validity of local average treatment effects (LATEs), specifically Angrist and Evans's use of same sex of the two first children as an instrumental variable for the effect of fertility on labor supply. We estimate their specification in 139 country-year censuses using Integrated Public Use Microdata Sample-International data. We compare each country-year's actual LATE to the extrapolated LATE from other country-years. We find that, with a sufficiently large reference sample, we extrapolate the treatment effect reasonably well, but the degree of accuracy depends on the extent of covariate similarity between the target and reference settings.

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  • James Bisbee & Rajeev Dehejia & Cristian Pop-Eleches & Cyrus Samii, 2017. "Local Instruments, Global Extrapolation: External Validity of the Labor Supply-Fertility Local Average Treatment Effect," Journal of Labor Economics, University of Chicago Press, vol. 35(S1), pages 99-147.
    • Handle: RePEc:ucp:jlabec:doi:10.1086/691280
    DOI: 10.1086/691280
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    Cited by:

    1. Rajeev Dehejia & Cristian Pop-Eleches & Cyrus Samii, 2021. "From Local to Global: External Validity in a Fertility Natural Experiment," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 39(1), pages 217-243, January.
    2. Frederico Finan & Demian Pouzo, 2021. "Reinforcing RCTs with Multiple Priors while Learning about External Validity," Papers 2112.09170, arXiv.org, revised Mar 2023.
    3. Pereda-Fernández, Santiago, 2023. "Identification and estimation of triangular models with a binary treatment," Journal of Econometrics, Elsevier, vol. 234(2), pages 585-623.
    4. Nikolova, Elena & Polansky, Jakub, 2022. "Children and female employment in Mongolia," Economic Systems, Elsevier, vol. 46(3).
    5. Denis Fougère & Nicolas Jacquemet, 2020. "Policy Evaluation Using Causal Inference Methods," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-03455978, HAL.
    6. Alexandra de Gendre & Jan Feld & Nicolás Salamanca & Ulf Zölitz, 2023. "Same-sex role model effects in education," ECON - Working Papers 438, Department of Economics - University of Zurich.
    7. Bhalotra, Sonia & Clarke, Damian & Walther, Selma, 2022. "Women's Careers and Family Formation," GLO Discussion Paper Series 1120, Global Labor Organization (GLO).
    8. Daniel Aaronson & Rajeev Dehejia & Andrew Jordan & Cristian Pop-Eleches & Cyrus Samii & Karl Schulze, 2021. "The Effect of Fertility on Mothers’ Labor Supply over the Last Two Centuries [Semiparametric instrumental variables estimation of treatment response models]," The Economic Journal, Royal Economic Society, vol. 131(633), pages 1-32.
    9. Denis Fougère & Nicolas Jacquemet, 2019. "Causal Inference and Impact Evaluation," Economie et Statistique / Economics and Statistics, Institut National de la Statistique et des Etudes Economiques (INSEE), issue 510-511-5, pages 181-200.
    10. Iva Trako, 2018. "Fertility and Parental Labor-Force Participation: New Evidence from a Developing Country in the Balkans," PSE Working Papers halshs-01828471, HAL.
    11. Nikolova, Elena & Polansky, Jakub, 2022. "Children and Female Employment in Mongolia," GLO Discussion Paper Series 1015, Global Labor Organization (GLO).
    12. Chu, Yu-Wei Luke & Cuffe, Harold E. & Doan, Nguyen, 2020. "Motherhood Employment Penalty and Gender Wage Gap Across Countries: 1990–2010," MPRA Paper 99866, University Library of Munich, Germany.
    13. Elena Nikolova & Jakub Polansky, 2022. "Children and Female Employment in Mongolia," Working Papers 396, Leibniz Institut für Ost- und Südosteuropaforschung (Institute for East and Southeast European Studies).
    14. Julia Schmieder, 2020. "Fertility as a Driver of Maternal Employment," Discussion Papers of DIW Berlin 1882, DIW Berlin, German Institute for Economic Research.
    15. Elena Nikolova & Jakub Polansky, 2022. "Children and Female Employment in Mongolia," Discussion Papers 61, Central European Labour Studies Institute (CELSI).
    16. Tymon S{l}oczy'nski & S. Derya Uysal & Jeffrey M. Wooldridge, 2022. "Abadie's Kappa and Weighting Estimators of the Local Average Treatment Effect," Papers 2204.07672, arXiv.org, revised Feb 2024.
    17. Iva Trako, 2018. "Fertility and Parental Labor-Force Participation: New Evidence from a Developing Country in the Balkans," Working Papers halshs-01828471, HAL.
    18. Jan Priebe, 2020. "Quasi-experimental evidence for the causal link between fertility and subjective well-being," Journal of Population Economics, Springer;European Society for Population Economics, vol. 33(3), pages 839-882, July.
    19. Chu, Yu-Wei Luke & Cuffe, Harold E & Doan, Nguyen, 2021. "Motherhood Employment Penalty and Gender Wage Gap Across Countries: 1990–2010," Working Paper Series 9446, Victoria University of Wellington, School of Economics and Finance.
    20. Schmieder, Julia, 2021. "Fertility as a driver of maternal employment," Labour Economics, Elsevier, vol. 72(C).

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    More about this item

    JEL classification:

    • C26 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Instrumental Variables (IV) Estimation
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • J1 - Labor and Demographic Economics - - Demographic Economics
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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