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Estimating the Benefit Incidence of an Antipoverty Program by Propensity Score Matching

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Author Info
Jyotsna Jalan (Indian Statistical Institute)
Martin Ravallion (World Bank)

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Abstract

Income gains from participation in economic programs are estimated as the difference between income with the program and that without it. The "with" data can be collected without much difficulty. But the "without" data are fundamentally unobserved, since an individual cannot be both a participant and a non-participant of the same program. It is common practice to estimate the unobserved income without the program as income with the program minus wages received. However, there are opportunity costs of participating in the program. Ignoring these foregone incomes of participation will result in over-estimation of the gains from the program.
We apply recent advances in propensity-score matching methods (PSM) to the problem of estimating the distribution of net income gains from an Argentinean workfare program. PSM allows us to draw a statistical comparison group to workfare participants from a larger contemporaneous and comparable survey of non-participants. The average incomes of the comparison group are compared with the average incomes of the participants to assess the direct income gains from the program.
The average gain is found to be about half the gross wage. Over half of the beneficiaries are in the poorest decile nationally, and 80% are in the poorest quintile. Our PSM estimator is reasonably robust to a number of changes in methodology, including a instrumental variables test for selection bias after matching.

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Paper provided by Econometric Society in its series Econometric Society World Congress 2000 Contributed Papers with number 0873.

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Date of creation: 01 Aug 2000
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Handle: RePEc:ecm:wc2000:0873

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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    Other versions:
  4. Ravallion, 1999. "Monitoring targeting performance when decentralized allocation to the poor are unobserved," Policy Research Working Paper Series 2080, The World Bank. [Downloadable!]
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  6. Heckman, James J. & Robb, Richard Jr., 1985. "Alternative methods for evaluating the impact of interventions : An overview," Journal of Econometrics, Elsevier, vol. 30(1-2), pages 239-267. [Downloadable!] (restricted)
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  8. Heckman, James J & Ichimura, Hidehiko & Todd, Petra E, 1997. "Matching as an Econometric Evaluation Estimator: Evidence from Evaluating a Job Training Programme," Review of Economic Studies, Blackwell Publishing, vol. 64(4), pages 605-54, October. [Downloadable!] (restricted)
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  10. Lipton, Michael & Ravallion, Martin, 1995. "Poverty and policy," Handbook of Development Economics, in: Hollis Chenery† & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 3, chapter 41, pages 2551-2657 Elsevier. [Downloadable!] (restricted)
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  11. Rajeev H. Dehejia & Sadek Wahba, 1998. "Causal Effects in Non-Experimental Studies: Re-Evaluating the Evaluation of Training Programs," NBER Working Papers 6586, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  15. Daniel Friedlander & David H. Greenberg & Philip K. Robins, 1997. "Evaluating Government Training Programs for the Economically Disadvantaged," Journal of Economic Literature, American Economic Association, vol. 35(4), pages 1809-1855, December. [Downloadable!] (restricted)
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  1. van de Walle, Dominique & Cratty, Dorothyjean, 2005. "Do donors get what they paid for? micro evidence on the fungibility of development project aid," Policy Research Working Paper Series 3542, The World Bank. [Downloadable!]
  2. Erin Godtland & Elisabeth Sadoulet & Alain de Janvry & Rinku Murgai & Oscar Ortiz, 2003. "The Impact of Farmer-Field-Schools on Knowledge and Productivity: A Study of Potato Farmers in the Peruvian Andes," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series 963, Department of Agricultural & Resource Economics, UC Berkeley. [Downloadable!]
  3. Bernard, Tanguy & Gabre-Madhin, Eleni Z. & Taffesse, Alemayehu Seyoum, 2007. "Smallholders' commercialization through cooperatives: A diagnostic for Ethiopia," IFPRI discussion papers 722, International Food Policy Research Institute (IFPRI). [Downloadable!]
  4. Jalan, Jyotsna & Ravallion, Martin, 2001. "Does piped water reduce diarrhea for children in rural India ?," Policy Research Working Paper Series 2664, The World Bank. [Downloadable!]
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  5. Essama-Nssah, B., 2006. "Propensity score matching and policy impact analysis - a demonstration in EViews," Policy Research Working Paper Series 3877, The World Bank. [Downloadable!]
  6. Sarah Brown & Karl Taylor, 2008. "Expectations, Reservation Wages And Employment: Evidence From British Panel Data," Working Papers 2008007, The University of Sheffield, Department of Economics, revised May 2008. [Downloadable!]
  7. Lant Pritchett & Sudarno Sumarto & Asep Suryahadi, 2002. "Targeted Programs in an Economic Crisis: Empirical Findings from the Experience of Indonesia," Governance Working Papers 84, East Asian Bureau of Economic Research. [Downloadable!]
  8. Antonio Trujillo & Jorge Portillo & John Vernon, 2005. "The Impact of Subsidized Health Insurance for the Poor: Evaluating the Colombian Experience Using Propensity Score Matching," International Journal of Health Care Finance and Economics, Springer, vol. 5(3), pages 211-239, September. [Downloadable!] (restricted)
  9. Lucas Ronconi & Juan Sanguinetti & Sandra Fachelli & Virginia Casazza & Ignacio Franceschelli, 2006. "Poverty and Employability Effects of Workfare Programs in Argentina," Cahiers de recherche PMMA 2006-14, PEP-PMMA. [Downloadable!]
  10. Sarah Brown & Karl Taylor, 2008. "Reservation Wages, Expected Wages and Labour Market Outcomes: Analysis of Individual Level Panel Data," Working Papers 2008008, The University of Sheffield, Department of Economics, revised Jul 2008. [Downloadable!]
  11. Víctor Elías & Fernanda Ruiz Núñez & Ricardo Cossa & David Bravo, 2004. "An Econometric Cost-Benefit Analysis of Argentina's Youth Training Program," RES Working Papers 3174, Inter-American Development Bank, Research Department. [Downloadable!]
  12. Sudhanshu Handa & John Maluccio, 2008. "Matching the gold standard: Comparing experimental and non-experimental evaluation techniques for a geographically targeted program," Middlebury College Working Paper Series 0813, Middlebury College, Department of Economics. [Downloadable!]
  13. Dillon, Andrew, 2008. "Access to irrigation and the escape from poverty: Evidence from Northern Mali," IFPRI discussion papers 782, International Food Policy Research Institute (IFPRI). [Downloadable!]
  14. Donald M. Pianto & Sergei Soares, 2004. "Use Of Survey Design For The Evaluation Of Social Programs: The Pnad And Peti," Anais do XXXII Encontro Nacional de Economia [Proceedings of the 32th Brazilian Economics Meeting] 133, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics]. [Downloadable!]
  15. Murgai, Rinku & Ravallion, Martin, 2005. "Is a guaranteed living wage a good anti-poverty policy?," Policy Research Working Paper Series 3640, The World Bank. [Downloadable!]
  16. del Ninno, Carlo & Dorosh, Paul A., 2002. "In-kind transfers and household food consumption," FCND discussion papers 134, International Food Policy Research Institute (IFPRI). [Downloadable!]
    Other versions:
  17. Naci Mocan & Erdal Tekin, 2006. "Catholic Schools and Bad Behavior: A Propensity Score Matching Analysis," Contributions to Economic Analysis & Policy, Berkeley Electronic Press, vol. 5(1), pages 1403-1403. [Downloadable!] (restricted)
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  18. Martin Ravallion, 2004. "Who is protected from budget cuts?," Journal of Policy Reform, Taylor and Francis Journals, vol. 7(2), pages 109-122, June. [Downloadable!] (restricted)
  19. Gauri Khanna, 2008. "The Impact on Child Health from Access to Water and Sanitation and Other Socioeconomic Factors," HEI Working Papers 02-2008, Economics Section, The Graduate Institute of International Studies, revised Jan 2008. [Downloadable!]
  20. Fajnzylber, Pablo & Maloney, William F. & Rojas, Gabriel V. Montes, 2006. "Releasing constraints to growth or pushing on a string ? the impact of credit, training, business associations, and taxes on the performance of Mexican micro-firms," Policy Research Working Paper Series 3807, The World Bank. [Downloadable!]
  21. Maloney, William F., 2001. "Evaluating emergency programs," Policy Research Working Paper Series 2728, The World Bank. [Downloadable!]
  22. Chen, Shaohua & Ravallion, Martin & Wang, Youjuan, 2006. "Di Bao : a guaranteed minimum income in urban China?," Policy Research Working Paper Series 3805, The World Bank. [Downloadable!]
  23. Carola Álvarez & Florencia Devoto & Paul Winters, 2006. "Why do the poor leave the safety net in Mexico? A study of the effects of conditionality on dropouts," Working Papers 2006-10, American University, Department of Economics. [Downloadable!]
  24. Coady, David P., 2004. "Designing and evaluating social safety nets," FCND discussion papers 172, International Food Policy Research Institute (IFPRI). [Downloadable!]
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