Treatment Effects for Discrete Outcomes when Responses to Treatment Vary Among Observationally Identical Persons: An Application to Norwegian ...

Aakvik, Arild; Heckman, James J.; Vytlacil, Edward

doi:10.3386/t0262

Cited by 46 publications

(49 citation statements)

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“…1 To be included, an individual must be between 21 and 65 years of age (inclusive) during the year and have an IQ score above 26 and below 75. Individuals whose primary diagnosis was autism were excluded.…”

Section: Data and Variablesmentioning

confidence: 99%

Does Job Coaching Work?: Evidence from South Carolina

et al. 2008

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Providing employment-related services, including supported employment through job coaches, to individuals with developmental disabilities has been a priority in federal policy for the past twenty years starting with the Developmental Disabilities Assistance and Bill of Rights Act in 1984. We take advantage of a unique panel data set of all clients served by the SC Department of Disabilities and Special Needs between 1999 and 2005 to investigate whether job coaching leads to stable employment in community settings. The data contain information on individual characteristics, such as IQ and the presence of emotional and behavioral problems, that are likely to affect both employment propensity and likelihood of receiving job coaching. We control for unobserved heterogeneity and endogeneity using fixed effects and instrumental variable models. Our results show that unobserved individual characteristics and endogeneity strongly bias naive estimates of the effects of job coaching. However, even after controlling for these, an economically and statistically significant effect remains.JEL codes: J29, I38, J14

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Section: Data and Variablesmentioning

confidence: 99%

Does Job Coaching Work?: Evidence from South Carolina

et al. 2008

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“…Our motivation for studying this topic stems from the literature on the intergenerational transmission of welfare use. Several studies have established a strong positive correlation in welfare use across generations within a family for the US (e.g., Antel (1992), An et. al.…”

Section: ) Previous Literaturementioning

confidence: 99%

“…To the extent that these controls capture all the individual characteristics associated with both education and welfare outcomes, any remaining estimated correlation between completing high school and welfare outcomes reflects a causal impact of education in reducing future welfare use. Second, we use an estimator described in Aakvik, Heckman and Vytlacil (2000) in which we allow for an unobservable factor which may affect both high school graduation and welfare outcomes. This estimator, in principle, generates consistent estimates on its own because it directly incorporates a common unobservable factor, but we implement this estimator using exclusion restrictions that form our third (instrumental variables) approach to the identification problem.…”

Section: Breaking the Cycle? The Effect Of Education On Welfare Receimentioning

confidence: 99%

Breaking the cycle? The effect of education on welfare receipt among children of welfare recipients

Coelli

Green

Warburton

2004

Working Paper Series

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We examine the impact of high school graduation on the probability individuals from welfare backgrounds use welfare themselves. Our data consists of administrative educational records for grade 12 students in a Canadian province linked with their own and their parents' welfare records. We address potential endogeneity problems by: 1) controlling for ability using past test scores; 2) using an instrument for graduation based on school principal fixed effects; and 3) using a HeckmanSinger type unobserved heterogeneity estimator. Graduation would reduce welfare receipt of dropouts by ½ to 3/4. Effects are larger for individuals from troubled family backgrounds and low income neighbourhoods. Welfare systems in a number of developed countries have undergone reforms in recent years, with some of the reforms being extensive. A key focus in many reforms has been the desire to break "cycles of dependency" in which welfare receipt at one point in time is believed to generate higher probabilities of receipt in the future. Of greatest concern are inter-generational welfare traps where welfare receipt by parents may lead to increased welfare dependency among children once they grow up. In several countries, empirical work has shown a strong positive correlation between welfare rates of successive generations within families. Whether this correlation reflects a causal impact of parental welfare use on children's behavioural patterns or simply correlations in unobserved characteristics common to the parents and children has been the focus of some debate.Several, though not all, investigations of this issue for the US point to the conclusion that a substantial part of the correlation is causal. This result has led some to advocate a policy of reducing access to welfare for current adults in part in order to reduce dependency of future generations. We are interested in investigating an alternative policy response: breaking the cycle by improving the educational outcomes of children of welfare recipients. Thus, we examine the effects of increasing the education levels of children from welfare households on their future welfare use . 1 We study the impact of high school graduation on the probability individuals from welfare backgrounds use welfare themselves at each age between 19 and 24. Our data is a unique linking of educational records from all individuals entering grade 12 in the Canadian province of British Columbia (BC) between 1991 and 1996 with both their own and their parents' welfare records. The education data includes information on whether the individual graduated from high school (i.e., completed grade 12), whether he or she had failed any earlier grades, test scores from exams in grade 11, and characteristics of the school. We identify children from welfare backgrounds as 2 students from households which received welfare income at any time before the child turned 17. For the children themselves, we know whether they received welfare at each age from when they first become eligible for welfare (age 19) to the end o...

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“…We therefore specify a discrete-choice, latent index model where the unobservables are generated by a normal one factor structure based on the framework discussed above and earlier formulated by Aakvik et al (2000). We assume that the error terms in equation (1) - (3) are governed by the following one factor structure…”

Section: Model With Discrete Outcome Measurementioning

confidence: 99%

“…This is a sensitive point since it is believed that unobserved factors such as aptitude and ambition play an important role in the selection to the program, but are not easily observed or approximated. Our choice of model is therefore a latent index sample selection model formulated by Aakvik et al (2000). This model incorporates the selection process and allows for unobserved factors to explain the outcome in each state, as well as in the selection process.…”

Section: Introductionmentioning

confidence: 99%

Assessing the Employment Effects of Labor Market Training Programs in Sweden

Andrén

2002

SSRN Journal

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Several studies have examined the effects of training programs on employment. Most of them assume that the effects of training are constant for all potential trainees. We use an econometric framework that allows studying the heterogeneous training effects on discrete outcomes. The treatment effect is allowed to vary depending on the trainee's observable and unobservable characteristics, and allows selection into training to be determined in part by the trainee's idiosyncratic treatment effect. Furthermore, we investigate the importance of the unobservables in the selection to training and how efficient the selection is with respect to the outcome. The results show small positive effects for the Swedish-born. The treatment on the treated is larger than the average treatment effect, indicating that the selection is stronger for the treated, and 40% of those treated gain by participating in training. Foreign-born have a negative effect from training the first year, with an average treatment effect larger than the treatment on the treated. From those who participated in training, only 11% experienced positive effect, while 38% were hurt by the training. The unobserved factors are important in the selection to training, as well as for the outcome. The effect of the selection is stronger for Swedish-born compared to foreign-born.Keywords: labor market training, one factor model, selection, heterogeneous response, unobserved heterogeneity, treatment on the treated. JEL classification: J31, J38.♣ We would like to thank The Office of Labor Market Policy Evaluation (IFAU) for the financial support.

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Treatment Effects for Discrete Outcomes when Responses to Treatment Vary Among Observationally Identical Persons: An Application to Norwegian ...

Cited by 46 publications

References 0 publications

Does Job Coaching Work?: Evidence from South Carolina

Does Job Coaching Work?: Evidence from South Carolina

Breaking the cycle? The effect of education on welfare receipt among children of welfare recipients

Assessing the Employment Effects of Labor Market Training Programs in Sweden

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