Taking an Extra Moment to Consider Treatment Effects on Distributions

Gawain Heckley () and Dennis Petrie ()
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Gawain Heckley: Centre for Economic Demography, Lund University, Postal: School of Economics and Management, S-220 07 Lund, Sweden, https://sites.google.com/site/gawainheckley/home
Dennis Petrie: Monash Business School, Monash University, Postal: Level 5 Building H, Caulfield, Victoria 3145, Australia

No 2025:4, Working Papers from Lund University, Department of Economics

Abstract: This paper introduces Parameter Estimation by Raw Moments (PERM), a flexible method for evaluating a policy’s impact on the parameters of an outcome distribution. Such parameters include the variance, skewness and covariance of two outcomes. PERM simplifies distributional analysis by first separately estimating higher-order moment treatment effects, then combining these to derive distribution parameter treatment effects. Two implementations are discussed: regression with controls and DiD with staggered roll-out. Applying PERM DiD to a Swedish school reform finds it reduced education inequality but increased earnings variance resulting in a lower covariance between education and earnings.

Keywords: Causal Inference; Policy Evaluation; Distribution Impacts; Income Inequality; Education Inequality (search for similar items in EconPapers)
JEL-codes: C10 I24 I26 (search for similar items in EconPapers)
Pages: 67 pages
Date: 2025-03-28
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:lunewp:2025_004

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