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Estimating distributions of treatment effects with an application to the returns to schooling and measurement of the effects of uncertainty on college choice

Pedro Carneiro (), Karsten Hansen () and James Heckman
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Karsten Hansen: Kellog School of Management, Northwestern University, Postal: 2001 Sheridan Rd, Evanston, IL 60208,

No 2003:9, Working Paper Series from IFAU - Institute for Evaluation of Labour Market and Education Policy

Abstract: This paper uses factor models to identify and estimate distributions of counterfactuals. We extend LISREL frameworks to a dynamic treatment effect setting, extending matching to account for unobserved conditioning variables. Using these models, we can identify all pairwise and joint treatment effects. We apply these methods to a model of schooling and determine the intrinsic uncertainty facing agents at the time they make their decisions about enrollment in school. Reducing uncertainty in returns raises college enrollment. We go beyond the “Veil of ignorance” in evaluating educational policies and determine who benefits and loses from commonly proposed educational reforms.

Keywords: Factor models; model of schooling; distributions of counterfactual outcomes (search for similar items in EconPapers)
JEL-codes: C31 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ecm
Date: 2003-01-22
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Citations: View citations in EconPapers (215) Track citations by RSS feed

Published in International Economic Review, 2003, pages 361-422.

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