Concave-Monotone Treatment Response and Monotone Treatment Selection: With an Application to the Returns to Schooling

Tsunao Okumura, 綱雄 奥村, ツナオ オクムラ, Emiko Usui, 恵美子 臼井 and エミコ ウスイ

No 475, PIE/CIS Discussion Paper from Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University

Abstract: This paper identifies sharp bounds on the mean treatment response and average treatment effect under the assumptions of both concave monotone treatment response (concave-MTR) and monotone treatment selection (MTS). We use our bounds and the US National Longitudinal Survey of Youth to estimate mean returns to schooling. Our upperbound estimates are substantially smaller than (1) estimates using only the concave-MTR assumption of Manski (1997) and (2) estimates using only the MTR and MTS assumptions of Manski and Pepper (2000). They fall in the lower range of the point estimates given in previous studies that assume linear wage functions. This is because ability bias is corrected by assuming MTS when the functions are close to linear. Our results therefore imply that higher returns reported in previous studies are likely to be overestimated.

Keywords: Nonparametric Methods; Partial Identification; Sharp Bounds; Treatment Response; Returns to Schooling (search for similar items in EconPapers)
JEL-codes: C14 J24 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2010-06
New Economics Papers: this item is included in nep-ecm
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https://hermes-ir.lib.hit-u.ac.jp/hermes/ir/re/18572/pie_dp475.pdf

Related works:
Journal Article: Concave‐monotone treatment response and monotone treatment selection: With an application to the returns to schooling (2014)
Working Paper: Concave-Monotone Treatment Response and Monotone Treatment Selection: With an Application to the Returns to Schooling (2010)
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