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ExtrapoLATE-ing: External Validity and Overidentification in the LATE Framework

Joshua Angrist, Ivan Fernandez-Val

NBER Working Paper No. 16566
Issued in December 2010
NBER Program(s):The Program on Children, The Education Program, The Health Economics Program, The Labor Studies Program, The Public Economics Program

This paper develops a covariate-based approach to the external validity of instrumental variables (IV) estimates. Assuming that differences in observed complier characteristics are what make IV estimates differ from one another and from parameters like the effect of treatment on the treated, we show how to construct estimates for new subpopulations from a given set of covariate-specific LATEs. We also develop a reweighting procedure that uses the traditional overidentification test statistic to define a population for which a given pair of IV estimates has external validity. These ideas are illustrated through a comparison of twins and sex-composition IV estimates of the effects childbearing on labor supply.

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Document Object Identifier (DOI): 10.3386/w16566

Published: “ExtrapoLATE - ing: External Validity and Overidentification in the LATE Framework,” (with Ivan Fernandez - Val), in D. Acemoglu, M. Arellano, and E. Dekel, eds., Advances in Economics and Econometrics , Cambrid ge University Press: 2013.

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