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IZA
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Treatment Effect Heterogeneity in Theory and Practice
by
Joshua Angrist
(August 2003)
published in: Economic Journal, 2004, 114 (494), C52-C83
Abstract:
Instrumental Variables (IV) methods identify internally valid causal effects for individuals
whose treatment status is manipulable by the instrument at hand. Inference for other
populations requires homogeneity assumptions. This paper outlines a theoretical framework
that nests causal homogeneity assumptions. These ideas are illustrated using sibling-sex
composition to estimate the effect of child-bearing on economic and marital outcomes. The
application is motivated by American welfare reform. The empirical results generally support
the notion of reduced labor supply and increased poverty as a consequence of childbearing,
but evidence on the impact of childbearing on marital stability and welfare use is more
tenuous.
Text: See Discussion Paper No. 851
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