Structural Estimation and Policy Evaluation in Developing Countries

Posted: 18 Oct 2010

See all articles by Petra Todd

Petra Todd

University of Pennsylvania - Department of Economics; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

Kenneth I. Wolpin

University of Pennsylvania

Multiple version iconThere are 2 versions of this paper

Date Written: February 2010

Abstract

This review discusses the use of discrete choice dynamic programming (DCDP) methods for evaluating policies of particular relevance to developing countries, such as policies to reduce child labor and increase school attendance, improve school quality, affect immigration flows, expand old-age pension benefits, or foster small-business investment through microfinance. We describe the DCDP framework and how it relates to static models, illustrate its application with an example related to conditional cash transfer programs, consider numerous empirical applications from the literature of how the DCDP methodology has been used to address substantively important policy issues, and discuss methods for model validation.

Suggested Citation

Todd, Petra and Wolpin, Kenneth I., Structural Estimation and Policy Evaluation in Developing Countries (February 2010). Annual Review of Economics, Vol. 2, pp. 21-50, 2010, Available at SSRN: https://ssrn.com/abstract=1693021 or http://dx.doi.org/10.1146/annurev.economics.102308.124345

Petra Todd (Contact Author)

University of Pennsylvania - Department of Economics ( email )

Ronald O. Perelman Center for Political Science
133 South 36th Street
Philadelphia, PA 19104-6297
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
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IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Kenneth I. Wolpin

University of Pennsylvania ( email )

Philadelphia, PA 19104
United States

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