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dc.contributor.authorBelzil, Christianen_US
dc.contributor.authorHansen, Jörgenen_US
dc.date.accessioned2010-03-23en_US
dc.date.accessioned2010-07-23T09:35:47Z-
dc.date.available2010-07-23T09:35:47Z-
dc.date.issued2010en_US
dc.identifier.urihttp://hdl.handle.net/10419/36926-
dc.description.abstractWe investigate if, and under which conditions, the distinction between dictatorial and incentive-based policy interventions affects the capacity of Instrument Variable (IV) methods to estimate the relevant treatment effect parameter of an outcome equation. The analysis is set in a non-trivial framework, in which the right-hand side variable of interest is affected by selectivity, and the error term is driven by a sequence of unobserved life-cycle endogenous choices. We show that, for a wide class of outcome equations, incentive-based policies may be designed so to generate a sufficient degree of post-intervention randomization (a lesser degree of selection on individual endowments among the sub-population affected). This helps the instrument to fulfill the orthogonality condition. However, for a same class of outcome equation, dictatorial policies that enforce minimum consumption cannot meet this condition. We illustrate these concepts within a calibrated dynamic life cycle model of human capital accumulation, and focus on the estimation of the returns to schooling using instruments generated from mandatory schooling reforms and education subsidies. We show how the nature of the skill accumulation process (substitutability vs complementarity) may play a fundamental role in interpreting IV estimates of the returns to schooling.en_US
dc.language.isoengen_US
dc.publisherIZA Bonnen_US
dc.relation.ispartofseriesDiscussion paper series // Forschungsinstitut zur Zukunft der Arbeit 4835en_US
dc.subject.jelB4en_US
dc.subject.jelC1en_US
dc.subject.jelC3en_US
dc.subject.ddc330en_US
dc.subject.keywordReturns to schoolingen_US
dc.subject.keywordinstrumental variable methodsen_US
dc.subject.keyworddynamic discrete choiceen_US
dc.subject.keyworddynamic programmingen_US
dc.subject.keywordlocal average treatment effectsen_US
dc.subject.stwBildungsertragen_US
dc.subject.stwBildungspolitiken_US
dc.subject.stwSubventionen_US
dc.subject.stwVergleichen_US
dc.subject.stwWirkungsanalyseen_US
dc.subject.stwInstrumentalvariablen-Schätzmethodeen_US
dc.subject.stwBildungsverhaltenen_US
dc.subject.stwDiskrete Entscheidungen_US
dc.subject.stwLebenszyklusen_US
dc.subject.stwDynamische Optimierungen_US
dc.subject.stwTheorieen_US
dc.titleThe distinction between dictatorial and incentive policy interventions and its implication for IV estimationen_US
dc.typeWorking Paperen_US
dc.identifier.ppn622402781en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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