Statistical verification of a natural "natural experiment": Tests and sensitivity checks for the sibling sex ratio instrument

Martin Huber

No 1219, Economics Working Paper Series from University of St. Gallen, School of Economics and Political Science

Abstract: This paper presents statistical evidence about the validity of the sibling sex ratio instrument proposed by Angrist and Evans (1998), a prominent natural “natural experiment” in the sense of Rosenzweig and Wolpin (2000). The sex ratio of the first two siblings is arguably randomly assigned and influences the probability of having a third child, which makes it a candidate instrument for fertility when estimating the effect of fertility on female labor supply. However, identification hinges on the satisfaction of the instrumental exclusion restriction and the monotonicity of fertility in the instrument, see Imbens and Angrist (1994). Using the methods of Kitagawa (2008), Huber and Mellace (2011a), and Huber and Mellace (2012), we for the first time verify the validity of the sibling sex ratio instrument by statistical hypothesis tests, which suggest that violations are small if not close to nonexistent. We also provide novel sensitivity checks to assess deviations from the exclusion restriction and/or monotonicity in the nonparametric local average treatment effect framework and find the negative labor supply effect of fertility to be robust to a plausible range of violations.

Keywords: instrumental variable; treatment effects; LATE; tests; sensitivity analysis. (search for similar items in EconPapers)
JEL-codes: C12 C21 C26 J13 J22 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2012-08
New Economics Papers: this item is included in nep-dem and nep-ecm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:usg:econwp:2012:19

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