Sample Selection Bias and the Nature of Unemployment

The most disturbing and difficult empirical problems of labor economics revolve around the absence of crucial information; the wage an unemployed person would receive if he or she were working. The most controversial policy problem of labor economics is embodied in the question; when is unemployment a problem? The goal of this paper is to propose a methodology for studying the first problem that sheds some light on the second

How Important are Classroom Peer Effects? Evidence from Boston\u27s Metco Program

Most integration programs transfer students between schools within districts. In this paper, we study the impact of Metco, a long-running desegregation program that sends mostly black students out of the Boston public school district to attend schools in more affluent suburban districts. We focus on the impact of Metco on the students in one of the largest Metco-receiving districts. In the 2000 school year, Metco increased the proportion black in this district from about 7.5 percent to almost 12.5 percent. Because Metco students have substantially lower test scores than local students, this inflow generates a significant decline in scores, with an especially marked effect on the lower quantiles. The overall decline is due to a composition effect, however, since OLS estimates show no impact on average scores in the sample of all non-Metco students. On the other hand, OLS and fixed effects estimates show some evidence of an effect on the scores of minority 3rd graders in reading and language. Instrumental variables estimates for 3rd graders are imprecise but generally in line with OLS. Further analysis shows the negative effects on 3rd graders to be clearly present only for girls. Given the highly localized nature of these results, we conclude that any peer effects from Metco are modest and short-lived

The Palestinian labor market between the Gulf War and autonomy

May 199

Evaluating Econometric Evaluations of Post-Secondary Aid

In an ongoing evaluation of post-secondary financial aid, we use random assignment to assess the causal effects of large privately-funded aid awards. Here, we compare the unbiased causal effect estimates from our RCT with two types of non-experimental econometric estimates. The first applies a selection-on-observables assumption in data from an earlier, nonrandomized cohort; the second uses a regression discontinuity design. Selection-on-observables methods generate estimates well below the experimental benchmark. Regression discontinuity estimates are similar to experimental estimates for students near the cutoff, but sensitive to controlling for the running variable, which is unusually coarse.Susan Thompson Buffett FoundationMassachusetts Institute of Technology. School Effectiveness & Inequality Initiative (Seed Fund