IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp4562.html

How Much Should We Trust Linear Instrumental Variables Estimators? An Application to Family Size and Children's Education

Author

Listed:
  • Mogstad, Magne

    (University of Chicago)

  • Wiswall, Matthew

    (University of Wisconsin-Madison)

Abstract

Many empirical studies specify outcomes as a linear function of endogenous regressors when conducting instrumental variable (IV) estimation. We show that tests for treatment effects, selection bias, and treatment effect heterogeneity are biased if the true relationship is non-linear. These results motivate a re-examination of recent evidence suggesting no causal effect of family size on children's education. Following common practice, a linear IV estimator has been used, assuming constant marginal effects of additional children across family sizes. We find that the conclusion of no effect of family size is an artifact of the linear specification, which masks substantial marginal family size effects.

Suggested Citation

  • Mogstad, Magne & Wiswall, Matthew, 2009. "How Much Should We Trust Linear Instrumental Variables Estimators? An Application to Family Size and Children's Education," IZA Discussion Papers 4562, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp4562
    as

    Download full text from publisher

    File URL: https://docs.iza.org/dp4562.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp4562. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Holger Hinte (email available below). General contact details of provider: https://edirc.repec.org/data/izaaade.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.