Machine learning for causal inference in economics

Anthony Strittmatter

IZA World of Labor, 2025, No 516, 516

Abstract: Machine learning (ML) improves economic policy analysis by addressing the complexity of modern data. It complements traditional econometric methods by handling numerous control variables, managing interactions and non-linearities flexibly, and uncovering nuanced differential causal effects. However, careful validation and awareness of limitations such as risk of bias, transparency issues, and data requirements are essential for informed policy recommendations.

Keywords: big data; causal AI; causal inference; double machine learning; machine learning; policy analysis (search for similar items in EconPapers)
Date: 2025
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