Publisher:
Lund University, School of Economics and Management, Department of Economics, Lund
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 (E[Y 2 ]-E[Y] 2 ), skewness and covariance of two outcomes. PERM simplifies distributional analysis by first separately estimating higher-order moment treatment effects (e.g., E[Y 2 ]), 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.