Local Instruments, Global Extrapolation: External Validity of the Labor Supply-Fertility Local Average Treatment Effect

James Bisbee, Rajeev Dehejia, Cristian Pop-Eleches and Cyrus Samii

No 21663, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We investigate whether local average treatment effects (LATE’s) can be extrapolated to new settings. We extend the analysis and framework of Dehejia, Pop-Eleches, and Samii (2015), which examines the external validity of the Angrist-Evans (1998) reduced-form natural experiment of having two first children of the same sex on the probability of an incremental child and on mother’s labor supply. We estimate Angrist and Evans's (1998) same-sex instrumental variable strategy in 139 country-year censuses using data from the Integrated Public Use Micro Sample International. We compare each country-year's LATE, as a hypothetical target, to the LATE extrapolated from other country-years (using the approach suggested by Angrist and Fernandez-Val 2010). Paralleling our findings in Dehejia, Pop-Eleches, and Samii (2015), we find that with a sufficiently large reference sample, we extrapolate the treatment effect reasonably well, but the degree of accuracy depends on the extent of covariate similarity between the target and reference settings. Our results suggest that – at least for our application – there is hope for external validity.

JEL-codes: C26 J01 J1 J13 J22 (search for similar items in EconPapers)
Date: 2015-10
New Economics Papers: this item is included in nep-dem and nep-lma
Note: CH LS
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Citations: View citations in EconPapers (4)

Published as James Bisbee & Rajeev Dehejia & Cristian Pop-Eleches & Cyrus Samii, 2017. "Local Instruments, Global Extrapolation: External Validity of the Labor Supply-Fertility Local Average Treatment Effect," Journal of Labor Economics, University of Chicago Press, vol. 35(S1), pages 99-147.

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