Identification of Marginal Treatment Effects using Subjective Expectations

Author / Creator

Briggs, Joseph S., author

Available as

Online

Summary

We develop a method to identify the individual latent propensity to select into treatment and marginal treatment effects. Identification is achieved with survey data on individuals' subjective expe...

We develop a method to identify the individual latent propensity to select into treatment and marginal treatment effects. Identification is achieved with survey data on individuals' subjective expectations of their treatment propensity and of their treatment-contingent outcomes. We use the method to study how child birth affects female labor supply in Denmark. We find limited latent heterogeneity and large short-term effects that vanish by 18 months after birth. We support the validity of the identifying assumptions in this context by using administrative data to show that the average treatment effect on the treated computed using our method and traditional event-study methods are nearly equal. Finally, we study the effects of counterfactual changes to child care cost and quality on female labor supply.

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