The nonparametric identification of the local average treatment effect (LATE) hinges on the satisfaction of three instrumental variable assumptions: (1) unconfounded assignment of the instrument, (2) no average direct effect of the instrument on the outcome within compliance types (exclusion...

We derive the limiting distribution of the Oaxaca estimator of average treatment effects studied by Kline (2011). A consistent estimator of the asymptotic variance is proposed that makes use of standard regression routines. It is shown that ignoring uncertainty in group means will tend to lead...

This paper compares asymptotic and finite sample properties of linear IV and bivariate probit in models with an endogenous binary treatment and binary outcome. The results provide guidance on the choice of model specification and help to explain large differences in the estimates depending on...

This paper proposes a simple method for testing whether non-compliance in experiments is ignorable, i.e., not jointly related to the treatment and the outcome. The approach consists of (i) regressing the outcome variable on a constant, the treatment, the assignment indicator, and the...

This paper assesses duration-specific treatment effects of fixed currency regimes on bilateral trade along a duration path of up to 25 years. We find that country-pairs with fixed exchange rate regimes trade more, but only after about 8 years.