TY  - JOUR
AU  - Heckman,James J.
AU  - Smith,Jeffrey A.
TI  - Evaluating the Welfare State
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 6542
PY  - 1998
Y2  - May 1998
UR  - http://www.nber.org/papers/w6542
L1  - http://www.nber.org/papers/w6542.pdf
N1  - Author contact info:
James J. Heckman
Department of Economics
The University of Chicago
1126 E. 59th Street
Chicago, IL 60637
Tel: 773/702-0634
Fax: 773/702-8490
E-Mail: jjh@uchicago.edu

Jeffrey Smith
Department of Economics
University of Michigan
238 Lorch Hall
611 Tappan Street
Ann Arbor, MI 48109-1220
Tel: 734/764-5359
E-Mail: econjeff@umich.edu
AB  - A variety of criteria are relevant for evaluating alternative policies in democratic societies composed of persons with diverse values and perspectives.  In this paper, we consider alternative criteria for evaluating the welfare state, and the data required to operationalize them.  We examine sets of identifying assumptions that bound, or exactly produce, these alternative criteria given the availability of various types of data.  We consider the economic questions addressed by two widely-used econometric evaluation estimators and relate them to the requirements of a comprehensive cost-benefit analysis.  We present evidence on how the inference from the most commonly used econometric evaluation estimator is modified when the direct costs of a program are fully assessed, including the welfare costs of the taxes required to support the program.  Finally, we present evidence of the empirical inconsistency of alternative criteria derived from evaluations based on on self-selection and attrition decisions, and on self-reported evaluations from questionnaires when applied to a prototypical job training program.
ER  -