TY - JOUR
T1 - Training, wages, and sample selection
T2 - Estimating sharp bounds on treatment effects
AU - Lee, David S.
N1 - Funding Information: This paper empirically assesses the wage effects of the Job Corps program, one of the largest federally funded job training programs in the U.S.2 The Job Corps is a comprehensive program for economically disadvantaged youth aged 16–24 years and is quite intensive: the typical participant will live at a local Job Corps centre, receiving room, board, and health services while enrolled, for an average of about 8 months. During the stay, the individual can expect to receive about 1100 hours of vocational and academic instruction, equivalent to about 1 year in high school. The Job Corps is also expensive, with the average cost at about $14,000 per participant.3 This paper uses data from the National Job Corps Study, a randomized evaluation funded by the U.S. Department of Labor.
PY - 2009
Y1 - 2009
N2 - This paper empirically assesses the wage effects of the Job Corps program, one of the largest federally funded job training programs in the U.S. Even with the aid of a randomized experiment, the impact of a training program on wages is difficult to study because of sample selection, a pervasive problem in applied microeconometric research. Wage rates are only observed for those who are employed, and employment status itself may be affected by the training program. This paper develops an intuitive trimming procedure for bounding average treatment effects in the presence of sample selection. In contrast to existing methods, the procedure requires neither exclusion restrictions nor a bounded support for the outcome of interest. Identification results, estimators, and their asymptotic distribution are presented. The bounds suggest that the program raised wages, consistent with the notion that the Job Corps raises earnings by increasing human capital, rather than solely through encouraging work. The estimator is generally applicable to typical treatment evaluation problems in which there is nonrandom sample selection/attrition.
AB - This paper empirically assesses the wage effects of the Job Corps program, one of the largest federally funded job training programs in the U.S. Even with the aid of a randomized experiment, the impact of a training program on wages is difficult to study because of sample selection, a pervasive problem in applied microeconometric research. Wage rates are only observed for those who are employed, and employment status itself may be affected by the training program. This paper develops an intuitive trimming procedure for bounding average treatment effects in the presence of sample selection. In contrast to existing methods, the procedure requires neither exclusion restrictions nor a bounded support for the outcome of interest. Identification results, estimators, and their asymptotic distribution are presented. The bounds suggest that the program raised wages, consistent with the notion that the Job Corps raises earnings by increasing human capital, rather than solely through encouraging work. The estimator is generally applicable to typical treatment evaluation problems in which there is nonrandom sample selection/attrition.
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U2 - 10.1111/j.1467-937X.2009.00536.x
DO - 10.1111/j.1467-937X.2009.00536.x
M3 - Article
SN - 0034-6527
VL - 76
SP - 1071
EP - 1102
JO - Review of Economic Studies
JF - Review of Economic Studies
IS - 3
ER -