Identification and estimation of unconditional policy effects of an endogenous binary treatment: An unconditional MTE approach

Julian Martinez-Iriarte and Yixiao Sun

Journal of Econometrics, 2024, vol. 244, issue 1

Abstract: This paper studies the identification and estimation of policy effects when treatment status is binary and endogenous. We introduce a new class of marginal treatment effects (MTEs) based on the influence function of the functional underlying the policy target. We show that an unconditional policy effect can be represented as a weighted average of the newly defined MTEs over the individuals who are indifferent about their treatment status. We provide conditions for point identification of the unconditional policy effects. When a quantile is the functional of interest, we introduce the UNconditional Instrumental Quantile Estimator (UNIQUE) and establish its consistency and asymptotic distribution. In the empirical application, we estimate the effect of changing college enrollment status, induced by higher tuition subsidy, on the quantiles of the wage distribution.

Keywords: Marginal treatment effect; Marginal policy-relevant treatment effect; Selection model; Instrumental variable; Unconditional policy effect; Unconditional quantile regression (search for similar items in EconPapers)
JEL-codes: C14 C31 C36 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:econom:v:244:y:2024:i:1:s0304407624002033

DOI: 10.1016/j.jeconom.2024.105858

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