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http://ssrn.com/abstract=195733
 
 

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Instrumental Variables Estimates Of The Effect Of Subsidized Training On The Quantiles Of Trainee Earnings


Alberto Abadie


Harvard University - Harvard Kennedy School (HKS); National Bureau of Economic Research (NBER)

Joshua D. Angrist


Massachusetts Institute of Technology (MIT) - Department of Economics; National Bureau of Economic Research (NBER); Institute for the Study of Labor (IZA)

Guido W. Imbens


Stanford Graduate School of Business

October 1999

MIT Department of Economics Working Paper No. 99-16

Abstract:     
The effect of government programs on the distribution of participants? earnings is important for program evaluation and welfare comparisons. This paper reports estimates of the effects of JTPA training programs on the distribution of earnings. The estimation uses a new instrumental variable (IV) method that measures program impacts on the quantiles of outcome variables. This quantile treatment effects (QTE) estimator accommodates exogenous covariates and reduces to quantile regression when selection for treatment is exogenously determined. The QTE estimator can be computed as the solution to a convex linear programming problem, although this requires first-step estimation of a nuisance function. We develop distribution theory for the case where the first step is estimated nonparametrically. For women, the empirical results show that the JTPA program had the largest proportional impact at low quantiles. Perhaps surprisingly, however, JTPA training raised the quantiles of earnings for men only in the upper half of the trainee earnings distribution.

Number of Pages in PDF File: 37

JEL Classification: C13, C14, C31, J31

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Date posted: December 1, 1999  

Suggested Citation

Abadie, Alberto and Angrist, Joshua D. and Imbens, Guido W., Instrumental Variables Estimates Of The Effect Of Subsidized Training On The Quantiles Of Trainee Earnings (October 1999). MIT Department of Economics Working Paper No. 99-16. Available at SSRN: http://ssrn.com/abstract=195733 or http://dx.doi.org/10.2139/ssrn.195733

Contact Information

Alberto Abadie (Contact Author)
Harvard University - Harvard Kennedy School (HKS) ( email )
79 John F. Kennedy Street
Cambridge, MA 02138
United States
617-496-4547 (Phone)
617-495-2575 (Fax)
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Joshua Angrist
Massachusetts Institute of Technology (MIT) - Department of Economics ( email )
50 Memorial Drive
E52-353
Cambridge, MA 02142
United States
617-253-8909 (Phone)
617-253-1330 (Fax)
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Institute for the Study of Labor (IZA)
P.O. Box 7240
Bonn, D-53072
Germany
Guido W. Imbens
Stanford Graduate School of Business ( email )
518 Memorial Way
Stanford, CA 94305-5015
United States

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References:  49
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