A Complete Framework for Model-Free Difference-in-Differences Estimation

Daniel Henderson () and Stefan Sperlich
Additional contact information
Stefan Sperlich: University of Geneva

No 15799, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We propose a complete framework for model-free difference-in-differences analysis with covariates, where model-free means data-driven, in particular nonparametric estimation and testing, variable and scale choice. We start with searching for the preferred data setup by simultaneously choosing confounders and a scale of the outcome variable along identification conditions. The treatment effects themselves are estimated in two steps: first, the heterogeneous effects stratified along the covariates, then the average treatment effect(s) for the population(s) of interest. We provide the asymptotic statistics as well as the finite sample behavior of our methods, and suggest bootstrap procedures to calculate standard errors and p-values of significance tests. The pertinence of our methods is shown with a study of the impact of the Deferred Action for Childhood Arrivals program on human capital responses of non-citizen immigrants. We show that past results underestimated the positive impact on school attendance for individuals aged 14-18, and the positive impact on high school completion. Moreover, we find that the parametric methods fail to identify the negative impact on school attendance of college aged individuals. Practical issues including bandwidth selection, sample weights, and implementation are given in the supplement.

Keywords: difference-in-differences estimators; causal analysis; nonparametrics; heterogeneous treatment effects (search for similar items in EconPapers)
JEL-codes: A2 C14 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2022-12
New Economics Papers: this item is included in nep-ecm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published - published in: Foundations and Trends in Econometrics, 2023, 12 (3), 232-323

Downloads: (external link)
https://docs.iza.org/dp15799.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp15799

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().