Treatment Effects for Discrete Outcomes when Responses to Treatment Vary Among Observationally Identical Persons: An Application to Norwegian ... / Arild Aakvik, James J. Heckman, Edward J. Vytlacil.

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Aakvik, Arild

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TextSeries: Technical Working Paper Series (National Bureau of Economic Research) ; no. t0262.Publication details: Cambridge, Mass. National Bureau of Economic Research 2000.Description: 1 online resource: illustrations (black and white)Subject(s):

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Abstract: This paper formulates an econometric framework for studying the impact of interventions on discrete outcomes when responses to treatment vary among observationally identical persons. Using a latent variable model that can be linked to well-posed economic models, we show how to define and interpret the average treatment effects, the average effect of treatment on the treated, the marginal treatment effect and the distribution of treatment effects for discrete outcomes. To estimate these parameters and the distribution of treatment effects, we formulate and estimate a discrete choice model with unobservables generated by a factor structure model. We apply our methods to evaluate the effect of Norwegian Vocational Rehabilitation training programs on employment outcomes for women. We find that applicants to these programs who participate in active training have a 4.6% higher employment rate than nonparticipants. When we control for the observable characteristics of applicants, we find that the average treatment effects falls to 4.1%. When we control for the unobservables characteristics of applicants, the average treatment effect falls to -1.4% and effect of treatment on the treated is -11%. We also find evidence of substantial heterogeneity in response to training.

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Previous	nber t0259 Instrumental Variables, Selection Models, and Tight Bounds on the Average Treatment Effect /	nber t0260 Semiparametric Estimation of Instrumental Variable Models for Causal Effects /	nber t0261 Bootstrap Tests for the Effect of a Treatment on the Distribution of an Outcome Variable /	nber t0262 Treatment Effects for Discrete Outcomes when Responses to Treatment Vary Among Observationally Identical Persons: An Application to Norwegian ... /	nber t0263 Using Studies of Treatment Response to Inform Treatment Choice in Heterogeneous Populations /	nber t0264 Long Memory and Regime Switching /	nber t0265 Time Use and Population Representation in the Sloan Study of Adolescents /	Next

September 2000.

This paper formulates an econometric framework for studying the impact of interventions on discrete outcomes when responses to treatment vary among observationally identical persons. Using a latent variable model that can be linked to well-posed economic models, we show how to define and interpret the average treatment effects, the average effect of treatment on the treated, the marginal treatment effect and the distribution of treatment effects for discrete outcomes. To estimate these parameters and the distribution of treatment effects, we formulate and estimate a discrete choice model with unobservables generated by a factor structure model. We apply our methods to evaluate the effect of Norwegian Vocational Rehabilitation training programs on employment outcomes for women. We find that applicants to these programs who participate in active training have a 4.6% higher employment rate than nonparticipants. When we control for the observable characteristics of applicants, we find that the average treatment effects falls to 4.1%. When we control for the unobservables characteristics of applicants, the average treatment effect falls to -1.4% and effect of treatment on the treated is -11%. We also find evidence of substantial heterogeneity in response to training.