Abstract

This paper reviews some of the most popular policy evaluation methods in empirical microeconomics: social experiments, natural experiments, matching, instrumental variables, discontinuity design, and control functions. It discusses identification of traditionally used average parameters and more complex distributional parameters. The adequacy, assumptions, and data requirements of each approach are discussed, drawing on empirical evidence from the education and employment policy evaluation literature. A workhorse simulation model of education and earnings is used throughout the paper to discuss and illustrate each approach. The full set of STATA data sets and dofiles are available free online and can be used to reproduce all estimation results.

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Additional Information

ISSN
1548-8004
Print ISSN
0022-166X
Pages
pp. 565-640
Launched on MUSE
2012-04-04
Open Access
No
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