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Alternative Approaches to Evaluation in Empirical Microeconomics

  • Blundell, Richard

    ()

    (University College London)

  • Costa Dias, Monica

    ()

    (Institute for Fiscal Studies, London)

This paper reviews some of the most popular policy evaluation methods in empirical microeconomics: social experiments, natural experiments, matching, instrumental variables, discontinuity design, and control functions. It discusses identification of traditionally used average parameters and more complex distributional parameters. The adequacy, assumptions, and data requirements of each approach are discussed drawing on empirical evidence from the education and employment policy evaluation literature. A workhorse simulation model of education returns is used throughout the paper to discuss and illustrate each approach. The full set of STATA datasets and do-files are available free online and can be used to reproduce all estimation and simulation results.

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File URL: http://ftp.iza.org/dp3800.pdf
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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3800.

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Length: 126 pages
Date of creation: Oct 2008
Date of revision:
Publication status: published in: Journal of Human Resources, 2009, 44 (3), 565-640
Handle: RePEc:iza:izadps:dp3800
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