Identification and Estimation of Intensive Margin Effects by Difference-in-Difference Methods

Markus Hersche and Elias Moor

Journal of Causal Inference, 2020, vol. 8, issue 1, 272-285

Abstract: This paper discusses identification and estimation of causal intensive margin effects. The causal intensive margin effect is defined as the treatment effect on the outcome of individuals with a positive outcome irrespective of whether they are treated or not, and is of interest for outcomes with corner solutions. The main issue is to deal with a potential selection problem that arises when conditioning on positive outcomes. We propose using difference-in-difference methods - conditional on positive outcomes - to estimate causal intensive margin effects. We derive sufficient conditions under which the difference-in-difference estimator identifies the causal intensive margin effect. We apply the methodology to estimate the causal intensive margin effect of reaching the full retirement age on working hours.

Keywords: Intensive margin effect; difference-in-difference; corner solutions; policy evaluation (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:bpj:causin:v:8:y:2020:i:1:p:272-285:n:2

DOI: 10.1515/jci-2019-0035

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