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Sharp Bounds for the Marginal Treatment Effect with Sample Selection

Vitor Possebom ()

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Abstract: I analyze treatment effects in situations when agents endogenously select into the treatment group and into the observed sample. As a theoretical contribution, I propose pointwise sharp bounds for the marginal treatment effect (MTE) of interest within the always-observed subpopulation under monotonicity assumptions. Moreover, I impose an extra mean dominance assumption to tighten the previous bounds. I further discuss how to identify those bounds when the support of the propensity score is either continuous or discrete. Using these results, I estimate bounds for the MTE of the Job Corps Training Program on hourly wages for the always-employed subpopulation and find that it is decreasing in the likelihood of attending the program within the Non-Hispanic group. For example, the Average Treatment Effect on the Treated is between \$.33 and \$.99 while the Average Treatment Effect on the Untreated is between \$.71 and \$3.00.

Date: 2019-04
New Economics Papers: this item is included in nep-ecm
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Handle: RePEc:arx:papers:1904.08522