Working Paper: NBER ID: w8840
Authors: Pedro Carneiro; Karsten T. Hansen; James J. Heckman
Abstract: This paper summarizes our recent research on evaluating the distributional consequences of social programs. This research advances the economic policy evaluation literature beyond estimating assorted mean impacts to estimate distributions of outcomes generated by different policies and determine how those policies shift persons across the distributions of potential outcomes produced by them. Our approach enables analysts to evaluate the distributional effects of social programs without invoking the 'Veil of Ignorance' assumption often used in the literature in applied welfare economics. Our methods determine which persons are affected by a given policy, where they come from in the ex-ante outcome distribution and what their gains are. We apply our methods to analyze two proposed policy reforms in American education. These reforms benefit the middle class and not the poor.
Keywords: No keywords provided
JEL Codes: I28; D33; H43
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Educational policy reforms (I28) | Shifting of individuals within the wage distribution (D39) |
| Implementation of educational policies (I28) | Benefits to individuals in the middle to high end of the wage distribution (J31) |
| Marginal entrants attracted into college (D29) | Smaller gains compared to average college students (D29) |
| Policies affecting choices of treatment (I18) | Altered individuals' outcomes (I12) |