Local Instruments, Global Extrapolation: External Validity of the Labor Supply-Fertility Local Average Treatment Effect

60 Pages Posted: 26 Oct 2015

See all articles by James Bisbee

James Bisbee

New York University (NYU) - Department of Politics

Rajeev H. Dehejia

New York University (NYU) - Robert F. Wagner Graduate School of Public Service; National Bureau of Economic Research (NBER); Institute for the Study of Labor (IZA); CESifo

Cristian Pop-Eleches

Columbia University - School of International & Public Affairs (SIPA)

Cyrus Samii

New York University (NYU) - Wilf Family Department of Politics

Date Written: October 2015

Abstract

We investigate whether local average treatment effects (LATE’s) can be extrapolated to new settings. We extend the analysis and framework of Dehejia, Pop-Eleches, and Samii (2015), which examines the external validity of the Angrist-Evans (1998) reduced-form natural experiment of having two first children of the same sex on the probability of an incremental child and on mother’s labor supply. We estimate Angrist and Evans's (1998) same-sex instrumental variable strategy in 139 country-year censuses using data from the Integrated Public Use Micro Sample International. We compare each country-year's LATE, as a hypothetical target, to the LATE extrapolated from other country-years (using the approach suggested by Angrist and Fernandez-Val 2010). Paralleling our findings in Dehejia, Pop-Eleches, and Samii (2015), we find that with a sufficiently large reference sample, we extrapolate the treatment effect reasonably well, but the degree of accuracy depends on the extent of covariate similarity between the target and reference settings. Our results suggest that – at least for our application – there is hope for external validity.

Suggested Citation

Bisbee, James and Dehejia, Rajeev H. and Pop-Eleches, Cristian (Kiki) and Samii, Cyrus, Local Instruments, Global Extrapolation: External Validity of the Labor Supply-Fertility Local Average Treatment Effect (October 2015). NBER Working Paper No. w21663, Available at SSRN: https://ssrn.com/abstract=2679701

James Bisbee (Contact Author)

New York University (NYU) - Department of Politics ( email )

New York, NY
United States

Rajeev H. Dehejia

New York University (NYU) - Robert F. Wagner Graduate School of Public Service ( email )

The Puck Building
295 Lafayette Street, Second Floor
New York, NY 10012
United States

HOME PAGE: http://users.nber.org/~rdehejia/

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

HOME PAGE: http://users.nber.org/~rdehejia/

Institute for the Study of Labor (IZA) ( email )

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

CESifo ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

Cristian (Kiki) Pop-Eleches

Columbia University - School of International & Public Affairs (SIPA) ( email )

420 West 118th Street
New York, NY 10027
United States

HOME PAGE: http://www.columbia.edu/~cp2124

Cyrus Samii

New York University (NYU) - Wilf Family Department of Politics ( email )

715 Broadway
New York, NY 10003
United States

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