Journal
INTERNATIONAL ECONOMIC REVIEW
Volume 44, Issue 2, Pages 361-422Publisher
BLACKWELL PUBLISHERS
DOI: 10.1111/1468-2354.t01-1-00074
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This article uses factor models to identify and estimate the distributions of counterfactuals. We extend LISREL frameworks to a dynamic treatment effect setting, extending matching to account for unobserved conditioning variables. Using these models, we can identify all pairwise and joint treatment effects. We apply these methods to a model of schooling and determine the intrinsic uncertainty facing agents at the time they make their decisions about enrollment in school. We go beyond the Veil of Ignorance in evaluating educational policies and determine who benefits and who loses from commonly proposed educational reforms.
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