Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/101872 
Year of Publication: 
2014
Series/Report no.: 
IZA Discussion Papers No. 8280
Publisher: 
Institute for the Study of Labor (IZA), Bonn
Abstract: 
This paper discusses the nonparametric identification of causal direct and indirect effects of a binary treatment based on instrumental variables. We identify the indirect effect, which operates through a mediator (i.e. intermediate variable) that is situated on the causal path between the treatment and the outcome, as well as the unmediated direct effect of the treatment using distinct instruments for the endogenous treatment and the endogenous mediator. We examine different settings to obtain nonparametric identification of (natural) direct and indirect as well as controlled direct effects for continuous and discrete mediators and continuous and discrete instruments. We illustrate our approach in two applications: to disentangle the effects (i) of education on health, which may be mediated by income, and (ii) of the Job Corps training program, which may affect earnings indirectly via working longer hours and directly via higher wages per hour.
Subjects: 
direct effect
indirect effect
instrument
treatment effects
JEL: 
C14
C21
Document Type: 
Working Paper

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