We investigate conditions sufficient for identification of average treatment effects using instrumental variables. First we show that the existence of valid instruments is not sufficient to identify any meaningful average treatment effect. We then establish that the combination of an instrument and a condition on the relation between the instrument and the participation status is sufficient for identification of a local average treatment effect for those who can be induced to change their participation status by changing the value of the instrument. Finally we derive the probability limit of the standard IV estimator under these conditions. It is seen to be a weighted average of local average treatment effects.

Evolution and Rationality Some Recent Game-Theoretic Results. Identification and Estimation of Local Average Treatment Effects

A detailed review of the education sector in Australia as in the data provided by the 2006 edition of the OECD's annual publication, 'Education at a Glance' is presented. While the data has shown that in almost all OECD countries educational attainment levels are on the rise, with countries showing impressive gains in university qualifications, it also reveals that a large of share of young people still do not complete secondary school, which remains a baseline for successful entry into the labour market.

/pdf/education-at-a-glance-m5vl7o68j5.pdf

Education at a Glance

This chapter seeks to set out what Economists have learned about the effects of early childhood influences on later life outcomes, and about ameliorating the effects of negative influences. We begin with a brief overview of the theory which illustrates that evidence of a causal relationship between a shock in early childhood and a future outcome says little about whether the relationship in question biological or immutable. We then survey recent work which shows that events before five years old can have large long term impacts on adult outcomes. Child and family characteristics measured at school entry do as much to explain future outcomes as factors that labor economists have more traditionally focused on, such as years of education. Yet while children can be permanently damaged at this age, an important message is that the damage can often be remediated. We provide a brief overview of evidence regarding the effectiveness of different types of policies to provide remediation. We conclude with a list of some of (the many) outstanding questions for future research. Hard-copy subscribers may access the tables for this paper here.

Human Capital Development Before Age Five

統計年鑑 = Statistical yearbook

This chapter seeks to set out what economists have learned about the effects of early childhood influences on later life outcomes, and about ameliorating the effects of negative influences. We begin with a brief overview of the theory which illustrates that evidence of a causal relationship between a shock in early childhood and a future outcome says little about whether the relationship in question is biological or immutable. We then survey recent work which shows that events before five years old can have large long term impacts on adult outcomes. Child and family characteristics measured at school entry do as much to explain future outcomes as factors that labor economists have more traditionally focused on, such as years of education. Yet while children can be permanently damaged at this age, an important message is that the damage can often be remediated. We provide a brief overview of evidence regarding the effectiveness of different types of policies to provide remediation. We conclude with a list of some of the many outstanding questions for future research.

/pdf/human-capital-development-before-age-five-20au2t3jf3.pdf

In-work transfer schemes have recently been suggested as a device for encouraging labour force participation and reducing the severity of the disincentives associated with out-of-work income support schemes. Here we estimate a discrete choice labour supply model which allows for endogenous in-work welfare programme participation. We also allow for involuntary unemployment so as to distinguish between programme non-participation and an inability to obtain work and thereby generate an eligibility to the programme.

https://papers.ssrn.com/sol3/Delivery.cfm/j_1468-0297_1997_tb00053_x_wml.pdf?abstractid=1997694&mirid=1&type=2

The labour supply, unemployment and participation of lone mothers in in‐work transfer programmes*

A recent reform to the UK unemployment insurance (UI) system has reduced the duration of entitlement from 12 to six months. The UI and welfare systems interact in the UK in such a way that exhaustion of UT for married individuals has potentially large disincentive effects on the labour supply of spouses. A model of labour supply is estimated for married women allowing for endogenous unemployment durations of husbands and wives. We distinguish between transfer programme induced incentive effects; correlation between labour supply and wages within couples; complementarity between the leisure times of spouses; and a discouraged worker effect.

/pdf/household-unemployment-and-the-labour-supply-of-married-347ha47xgo.pdf

Household unemployment and the labour supply of married women

In Great Britain the move away from rented accommodation to owner occupation is leaving behind a large group of households with low incomes, wages and hours of work, and high housing costs, who are increasingly in receipt of welfare transfers. The disparity along all of these dimensions between renters and owner occupiers has continued to grow since the 1970’s.

The relationship between housing costs, wages and transfer programmes is complex and yet plays an important part in determining the incentive to work for individuals in low income or high housing cost households. While it is true that many individuals who are in these categories are out of the labour force (retired, sick and disabled), there are many who are not and whose incentive to seek work, or to work harder if already in work, could be modified by directly changing the rent levels they face or indirectly via changes to the structure of programmes designed to subsidise housing for the poor.

Here we estimate a static discrete choice labour supply model which allows for housing benefit programme participation. We use samples of 42491 married women and 13340 unmarried women drawn from Great Britain Family Resources Surveys 1994/5-97/8. We find that women are quite responsive to labour supply incentives, housing benefit income has similar incentive effects to earned income which suggests any "stigma" is small. Our analysis is complemented by simulating housing benefit and direct rent subsidy reforms.

/pdf/housing-subsidies-and-work-incentives-in-great-britain-2pd3xkk3d5.pdf

Housing subsidies and work incentives in Great Britain

The incidence of income tax on wages and labour supply

We estimate a model of labour supply and participation in multiple cash and in-kind welfare programmes. The modeling exploits a reform that affected U.K. single mothers. In-work cash entitlements increased under this reform but eligibility to in-kind child nutrition programmes was lost for some households. When we allow for differences in the costs associated with each welfare programme we find that in- work cash and in-work in-kind transfers both have large positive labour supply effects. There is, however, a utility loss from programme participation which is estimated to be larger for the cash programme than for the child nutrition programmes. Our findings imply that the partial cash out of the in-kind transfers reduced labour supply and suggest that there may be a place in policy portfolios for in-kind programmes despite their "inefficiency".

/pdf/the-labour-supply-effects-of-a-partial-cash-out-of-in-kind-2vdhbj0bru.pdf

Paul Bingley

Papers

The labour supply, unemployment and participation of lone mothers in in‐work transfer programmes*

Household unemployment and the labour supply of married women

Housing subsidies and work incentives in Great Britain

The incidence of income tax on wages and labour supply

The labour supply effects of a partial cash-out of in-kind transfers to single mothers