Local Instruments, Global Extrapolation: External Validity of the Labor Supply-Fertility Local Average Treatment Effect / James Bisbee, Rajeev Dehejia, Cristian Pop-Eleches, Cyrus Samii.

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Bisbee, James

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TextSeries: Working Paper Series (National Bureau of Economic Research) ; no. w21663.Publication details: Cambridge, Mass. National Bureau of Economic Research 2015.Description: 1 online resource: illustrations (black and white)Subject(s):

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Abstract: We investigate whether local average treatment effects (LATE's) can be extrapolated to new settings. We extend the analysis and framework of Dehejia, Pop-Eleches, and Samii (2015), which examines the external validity of the Angrist-Evans (1998) reduced-form natural experiment of having two first children of the same sex on the probability of an incremental child and on mother's labor supply. We estimate Angrist and Evans's (1998) same-sex instrumental variable strategy in 139 country-year censuses using data from the Integrated Public Use Micro Sample International. We compare each country-year's LATE, as a hypothetical target, to the LATE extrapolated from other country-years (using the approach suggested by Angrist and Fernandez-Val 2010). Paralleling our findings in Dehejia, Pop-Eleches, and Samii (2015), we find that with a sufficiently large reference sample, we extrapolate the treatment effect reasonably well, but the degree of accuracy depends on the extent of covariate similarity between the target and reference settings. Our results suggest that - at least for our application - there is hope for external validity.

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Item type	Home library	Collection	Call number	Status	Date due	Barcode	Item holds
Working Paper	Biblioteca Digital	Colección NBER	nber w21663 (Browse shelf(Opens below))	Not For Loan

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October 2015.

We investigate whether local average treatment effects (LATE's) can be extrapolated to new settings. We extend the analysis and framework of Dehejia, Pop-Eleches, and Samii (2015), which examines the external validity of the Angrist-Evans (1998) reduced-form natural experiment of having two first children of the same sex on the probability of an incremental child and on mother's labor supply. We estimate Angrist and Evans's (1998) same-sex instrumental variable strategy in 139 country-year censuses using data from the Integrated Public Use Micro Sample International. We compare each country-year's LATE, as a hypothetical target, to the LATE extrapolated from other country-years (using the approach suggested by Angrist and Fernandez-Val 2010). Paralleling our findings in Dehejia, Pop-Eleches, and Samii (2015), we find that with a sufficiently large reference sample, we extrapolate the treatment effect reasonably well, but the degree of accuracy depends on the extent of covariate similarity between the target and reference settings. Our results suggest that - at least for our application - there is hope for external validity.