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Simple Estimators for Treatment Parameters in a Latent Variable Framework with an Application to Estimating the Returns to Schooling

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Listed:
  • James J. Heckman
  • Justin L. Tobias
  • Edward Vytlacil

Abstract

This paper derives simply computed closed-form expressions for the Average Treatment Effect (ATE), the effect of Treatment on the Treated (TT), Local Average Treatment Effect (LATE) and Marginal Treatment Effect (MTE) in a latent variable framework for both normal and non-normal models. The techniques presented in the paper are applied to estimating a variety of treatment parameters capturing the returns to a college education for various populations using data from the National Longitudinal Survey of Youth (NLSY).

Suggested Citation

  • James J. Heckman & Justin L. Tobias & Edward Vytlacil, 2000. "Simple Estimators for Treatment Parameters in a Latent Variable Framework with an Application to Estimating the Returns to Schooling," NBER Working Papers 7950, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:7950
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    References listed on IDEAS

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    1. John Cawley & Karen Conneely & James Heckman & Edward Vytlacil, 1996. "Cognitive Ability, Wages, and Meritocracy," NBER Working Papers 5645, National Bureau of Economic Research, Inc.
    2. James J. Heckman & Edward J. Vytlacil, 2000. "Local Instrumental Variables," NBER Technical Working Papers 0252, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Martin Chalkley & Colin Tilley, 2006. "Treatment intensity and provider remuneration: dentists in the British National Health Service," Health Economics, John Wiley & Sons, Ltd., vol. 15(9), pages 933-946.
    2. Claudio Sapelli & Bernardita Vial, 2002. "The Performance of Private and Public Schools in the Chilean Voucher System," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 39(118), pages 423-454.
    3. Claudio Sapelli & Bernardita Vial, 2003. "Peer Effects and Relative Performance of Voucher Schools in Chile," Documentos de Trabajo 256, Instituto de Economia. Pontificia Universidad Católica de Chile..
    4. Aakvik, Arild & Salvanes, Kjell G & Vaage, Kjell, 2003. "Measuring Heterogeneity in the Returns to Education in Norway Using Educational Reforms," CEPR Discussion Papers 4088, C.E.P.R. Discussion Papers.
    5. Coelli, Michael B. & Green, David A. & Warburton, William P., 2007. "Breaking the cycle? The effect of education on welfare receipt among children of welfare recipients," Journal of Public Economics, Elsevier, vol. 91(7-8), pages 1369-1398, August.
    6. Thomas Brodaty & Bruno Crépon & Denis Fougère, 2007. "Les méthodes micro-économétriques d'évaluation et leurs applications aux politiques actives de l'emploi," Economie & Prévision, La Documentation Française, vol. 0(1), pages 93-118.
    7. Alejandra Mizala & Pilar Romaguera, 2002. "Equity and Educational Performance," ECONOMIA JOURNAL, THE LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION - LACEA, vol. 0(Spring 20), pages 219-274, January.
    8. Claudio Sapelli & Bernardita Vial, 2005. "Private vs Public Voucher Schools in Chile: New Evidence on Efficiency and Peer Effects," Documentos de Trabajo 289, Instituto de Economia. Pontificia Universidad Católica de Chile..
    9. Abigail McKnight, 2011. "Estimates of the asset-effect: The search for a causal effect of assets on adult health and employment outcomes," CASE Papers case149, Centre for Analysis of Social Exclusion, LSE.
    10. Calderón-Madrid, Angel & Trejo, Belem, 2002. "The Impact of the Mexican Training Program for Unemployed Workers on Re-employment Dynamics and on Earnings," 10th International Conference on Panel Data, Berlin, July 5-6, 2002 A2-1, International Conferences on Panel Data.
    11. M. Li & J. L. Tobias, 2003. "A semiparametric investigation of the school quality-gs relationship," Applied Economics Letters, Taylor & Francis Journals, vol. 10(1), pages 43-45.
    12. Michael Gerfin & Robert E. Leu & Reto Nyffeler, 2003. "Berufliche Weiterbildung in der Schweiz," Diskussionsschriften dp0318, Universitaet Bern, Departement Volkswirtschaft.
    13. Flore Gubert & François Roubaud, 2005. "Analyser l’impact d’un projet de Micro-finance : l’exemple d’ADéFI à Madagascar," Working Papers DT/2005/14, DIAL (Développement, Institutions et Mondialisation).
    14. 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.
    15. M. Genius & E. Strazzera, 2003. "The copula approach of sampling selection modelling: an application to the recreational value of forests," Working Paper CRENoS 200308, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
    16. Thomas Andren & Daniela Andren, 2006. "Assessing the employment effects of vocational training using a one-factor model," Applied Economics, Taylor & Francis Journals, vol. 38(21), pages 2469-2486.
    17. Adolfo Sachsida & Mario Jorge C. de Mendonça & Fabio Stallivieri, 2007. "Ex-Convicts Face Multiple Labor Market Punishments: Estimates of Peer-Group and Stigma Effects Using Equations of Returns to Schooling," Economia, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics], vol. 8(3), pages .503-520.
    18. McKnight, Abigail, 2011. "Estimates of the asset-effect: the search for a causal effect of assets on adult health and employment outcomes," LSE Research Online Documents on Economics 43896, London School of Economics and Political Science, LSE Library.
    19. Alejandra Cattaneo & Rainer Winkelmann, 2005. "Earnings Differentials between German and French speakers in Switzerland," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 141(II), pages 191-212, June.
    20. Víctor Elías & Fernanda Ruiz Núñez & Ricardo Cossa & David Bravo, 2004. "An Econometric Cost-Benefit Analysis of Argentina's Youth Training Program," Research Department Publications 3174, Inter-American Development Bank, Research Department.
    21. Hirukawa, Masayuki & Prokhorov, Artem, 2017. "Consistent Estimation of Linear Regression Models Using Matched Data," Working Papers 2123/18063, University of Sydney Business School, Discipline of Business Analytics.
    22. Mark Dusheiko & Hugh Gravelle & Rowena Jacobs, 2004. "The effect of practice budgets on patient waiting times: allowing for selection bias," Health Economics, John Wiley & Sons, Ltd., vol. 13(10), pages 941-958.

    More about this item

    JEL classification:

    • C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General
    • C34 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Truncated and Censored Models; Switching Regression Models

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