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Alternative Approaches to Evaluation in Empirical Microeconomics

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Author Info
Richard Blundell () (University College London and Institute for Fiscal Studies)
Mónica Costa Dias () (CETE, Faculdade de Economia - Universidade do Porto and Institute for Fiscal Studies)

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Abstract

This paper reviews a range of the most popular policy evaluation methods in empirical microeconomics: social experiments, natural experiments, matching methods, instrumental variables, discontinuity design and control functions. It discusses the identification of both the traditionally used average parameters and more complex distributional parameters. In each case, the necessary assumptions and the data requirements are considered. The adequacy of each approach is discussed drawing on the empirical evidence from the education and labor market policy evaluation literature. We also develop an education evaluation model which we use to carry through the discussion of each alternative approach. A full set of STATA datasets are provided free online which contain Monte-Carlo replications of the various specifications of the education evaluation model. There are also a full set of STATA .do files for each of the estimation approaches described in the paper. The .do-files can be used together with the datasets to reproduce all the results in the paper.

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Publisher Info
Paper provided by Universidade do Porto, Faculdade de Economia do Porto in its series CETE Discussion Papers with number 0805.

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Length: 125 pages
Date of creation: Oct 2008
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Handle: RePEc:por:cetedp:0805

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Related research
Keywords: Evaluation methods; policy evaluation; matching methods; instrumental variables; social experiments; natural experiments; difference-in-differences; discontinuity design; control function.;

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Find related papers by JEL classification:
J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
J64 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Unemployment: Models, Duration, Incidence, and Job Search
C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data

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