Working Paper: NBER ID: w20142
Authors: Marianne P. Bitler; Jonah B. Gelbach; Hilary W. Hoynes
Abstract: In this paper, we assess whether welfare reform affects earnings only through mean impacts that are constant within but vary across subgroups. This is important because researchers interested in treatment effect heterogeneity typically restrict their attention to estimating mean impacts that are only allowed to vary across subgroups. Using a novel approach to simulating treatment group earnings under the constant mean-impacts within subgroup model, we find that this model does a poor job of capturing the treatment effect heterogeneity for Connecticut's Jobs First welfare reform experiment using quantile treatment effects. Notably, ignoring within-group heterogeneity would lead one to miss evidence that the Jobs First experiment's effects are consistent with central predictions of basic labor supply theory.
Keywords: Welfare Reform; Treatment Effects; Quantile Treatment Effects
JEL Codes: H75; I38; J18
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Mean impacts of the Jobs First welfare reform program (J68) | Treatment effect heterogeneity (C21) |
| Women with lower education levels and less earnings history (J79) | Treatment effect heterogeneity (C21) |
| Women with higher education and earnings history (J79) | Treatment effect heterogeneity (C21) |
| Ignoring within-group heterogeneity (C20) | Mean impacts model inadequacy (C20) |
| Presence of mass points at zero earnings (E01) | Mean impacts model inadequacy (C20) |
| Rejecting the null hypothesis of constant treatment effects across subgroups (C21) | Necessity for nuanced models (C52) |