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Partial Identification of Wage Effects of Training Programs

Brown University Economics Working Paper

50 Pages Posted: 27 Apr 2010  

Michael Lechner

University of St. Gallen - Swiss Institute for Empirical Economic Research

Blaise Melly

Brown University - Department of Economics

Date Written: April 27, 2010

Abstract

In an evaluation of a job-training program, the influence of the program on the individual wages is important, because it reflects the program effect on human capital. Estimating these effects is complicated because we observe wages only for employed individuals, and employment is itself an outcome of the program. Only usually implausible assumptions allow identifying these treatment effects. Therefore, we suggest weaker and more credible assumptions that bound various average and quantile effects. For these bounds, consistent, nonparametric estimators are proposed. In a reevaluation of a German training program, we find that a considerable improvement of the long-run potential wages of its participants.

Keywords: Bounds, Treatment Effects, Causal Effects, Program Evaluation

JEL Classification: C21, C31, J30, J68

Suggested Citation

Lechner, Michael and Melly, Blaise, Partial Identification of Wage Effects of Training Programs (April 27, 2010). Brown University Economics Working Paper. Available at SSRN: https://ssrn.com/abstract=1596715 or http://dx.doi.org/10.2139/ssrn.1596715

Michael Lechner (Contact Author)

University of St. Gallen - Swiss Institute for Empirical Economic Research ( email )

Varnbuelstrasse 14
St. Gallen, 9000
Switzerland
+41 71 224 2320 (Phone)

Blaise Melly

Brown University - Department of Economics ( email )

64 Waterman Street
Providence, RI 02912
United States

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