Simple Estimators for Treatment Parameters in a Latent Variable Framework with an Application to Estimating the Returns to Schooling

Heckman, James J.; Tobias, Justin L.; Vytlacil, Edward

Simple Estimators for Treatment Parameters in a Latent Variable Framework with an Application to Estimating the Returns to Schooling

36 Pages Posted: 12 Oct 2000 Last revised: 19 Oct 2010

James J. Heckman

University of Chicago - Department of Economics; National Bureau of Economic Research (NBER); American Bar Foundation; Institute for the Study of Labor (IZA); CESifo (Center for Economic Studies and Ifo Institute)

Justin L. Tobias

University of California, Irvine - Department of Economics

Edward Vytlacil

Yale University - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: October 2000

Abstract

This paper derives simply computed closed-form expressions for the Average Treatment Effect (ATE), the effect of Treatment on the Treated (TT), Local Average Treatment Effect (LATE) and Marginal Treatment Effect (MTE) in a latent variable framework for both normal and non-normal models. The techniques presented in the paper are applied to estimating a variety of treatment parameters capturing the returns to a college education for various populations using data from the National Longitudinal Survey of Youth (NLSY).

Suggested Citation: Suggested Citation

Heckman, James J. and Tobias, Justin L. and Vytlacil, Edward J., Simple Estimators for Treatment Parameters in a Latent Variable Framework with an Application to Estimating the Returns to Schooling (October 2000). NBER Working Paper No. w7950. Available at SSRN: https://ssrn.com/abstract=245731