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| Title: | | Sharpening the effectiveness of natural experiments as an analytical tool  |
| Authors: | | Duleep, Harriet Orcutt |
| Issue Date: | | 2012 |
| Series/Report no.: | | Discussion Paper series, Forschungsinstitut zur Zukunft der Arbeit 6682 |
| Abstract: | | The importance of using natural experiments in economic research has long been recognized. Yet, it is only in recent years that natural experiments have become an integral part of the economist's analytical toolbox, thanks to the efforts of Meyer, Card, Peters, Krueger, Gruber, and others. This use promises to shed new light on a variety of public policy issues and has already caused a major challenge to some tightly held beliefs in economics, most vividly illustrated by the finding of a positive effect of a minimum wage increase on the employment of low-wage workers. Although currently in vogue in economic research, the analysis of natural experiments could be substantially strengthened. This paper discusses several methodological approaches that would increase the precision and reliability of the results stemming from the analysis of natural experiments. A theme underlying all of these proposals is how best to measure the effect of a treatment on a variable, as opposed to explaining a level or change in a variable. |
| Subjects: | | natural experiments regression format treatment effect precision extraneous group-specific effects minimum wage divorce laws military service Julian Simon |
| JEL: | | J08 J18 J38 J48 |
| Document Type: | | Working Paper |
| Appears in Collections: | | IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)
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