Evaluating the Welfare State
AbstractA variety of criteria are relevant for evaluating alternative policies in democratic societies composed of persons with diverse values and perspectives. In this paper, we consider alternative criteria for evaluating the welfare state, and the data required to operationalize them. We examine sets of identifying assumptions that bound, or exactly produce, these alternative criteria given the availability of various types of data. We consider the economic questions addressed by two widely-used econometric evaluation estimators and relate them to the requirements of a comprehensive cost-benefit analysis. We present evidence on how the inference from the most commonly used econometric evaluation estimator is modified when the direct costs of a program are fully assessed, including the welfare costs of the taxes required to support the program. Finally, we present evidence of the empirical inconsistency of alternative criteria derived from evaluations based on on self-selection and attrition decisions, and on self-reported evaluations from questionnaires when applied to a prototypical job training program.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 6542.
Date of creation: May 1998
Date of revision:
Publication status: published as Econometrics and Economic Theory in the 20th Century: The Ragnar Frisch Centennial, Strom, Steiner, ed., Cambridge: Cambridge University Press, 1998, pp. 241-318.
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Find related papers by JEL classification:
- H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate
- C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
This paper has been announced in the following NEP Reports:
- NEP-ALL-1998-05-04 (All new papers)
- NEP-PBE-1998-05-04 (Public Economics)
- NEP-POL-1998-05-04 (Positive Political Economics)
- NEP-PUB-1998-05-04 (Public Finance)
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