Using administrative, longitudinal data on felony arrests in Florida, we exploit the discontinuous increase in the punitiveness of criminal sanctions at 18 to estimate the deterrence effect of incarceration. Our analysis suggests a 2 percent decline in the log-odds of offending at 18, with standard errors ruling out declines of 11 percent or more. We interpret these magnitudes using a stochastic dynamic extension of Becker’s (1968) model of criminal behavior. Calibrating the model to match key empirical moments, we conclude that deterrence elasticities with respect to sentence lengths are no more negative than-0.13 for young offenders.

Die ZBW räumt Ihnen als Nutzerin/Nutzer das unentgeltliche, räumlich unbeschränkte und zeitlich auf die Dauer des Schutzrechts beschränkte einfache Recht ein, das ausgewählte Werk im Rahmen der unter

We estimate the effect of new private-sector unionization on publicly traded firms ’ equity value in the United States over the 1961–1999 period using a newly assembled sample of National Labor Relations Board (NLRB) representation elections matchedtostock market data. Event-study estimates showan average union effect on the equity value of the firm equivalent to $40,500 per unionized worker, an effect that takes 15 to 18 months after unionization to fully materialize, and one that could not be detected by a short-run event study. At the same time, point estimates from a regression discontinuity design—comparing the stock market impact of close union election wins to close losses—are considerably smaller and close to zero. We find a negative relationship between the cumulative abnormal returns and the vote share in support of the union, allowing us to reconcile these seemingly contradictory findings. JEL Codes: J01, J08, J5, J51. “Laymen and economists alike tend, in my view, to exaggerate greatly the extent to which labor unions affect the structure and level of wage rates. ” 1 “Everyone ‘knows ’ that unions raise wages. The questions are how much, under what conditions, and with what effects on the overall performance of the economy. ” 2 I.

University tuition typically remains constant throughout years of enroll-ment while delayed degree completion is an increasing problem for many academic institutions around the world. Theory suggests that if contin-uation tuition were raised the probability of late graduation would be reduced. Using a Regression Discontinuity Design on data from Bocconi University in Italy, we show that an increase of 1,000 euro in continua-tion tuition reduces the probability of late graduation by 5.2 percentage points with respect to a benchmark average probability of 80%. We also show that this decline in the probability of late graduation is not associ-ated with an increase in the dropout rate or with a fall in the quality of students ’ performance as measured by the final graduation mark.

This chapter provides a selective review of some contemporary approaches to program evaluation. One motivation for our review is the recent emergence and increasing use of a particular kind of “program ” in applied microeconomic research, the so-called Regression Discontinuity (RD) Design of Thistlethwaite and Campbell (1960). We organize our discussion of these various research designs by how they secure internal validity: in this view, the RD design can been seen as a close “cousin ” of the randomized experiment. An important distinction which emerges from our discussion of “heterogeneous treatment effects ” is between ex post (descriptive) and ex ante (predictive) evaluations; these two types of evaluations have distinct, but complementary goals. A second important distinction we make is between statistical statements that are descriptions of our knowledge of the program assignment process and statistical statements that are structural assumptions about individual behavior. Using these distinctions, we examine some commonly employed evaluation strategies, and assess them with a common set of criteria for “internal validity”, the foremost goal of an ex post evaluation. In some cases, we also provide some concrete illustrations of how internally valid causal estimates can be supplemented with specific structural assumptions to address “external validity”: the estimate from an internally valid "experimental " estimate can be viewed as a “leading term ” in an extrapolation for a parameter of interest in an ex ante evaluation.

Uppsala, Wharton and Zürich. Andrea Weber gratefully acknowledges research funding from the Austrian

The wage paid to elected officials affects both the self-selection of citizens willing to run for office and the performance of those who are appointed. On one side, if skilled individuals shy away from politics because of higher opportunities in the private sector, an increase in politicians ’ pay might change their mind. On the other side, if the reelection prospects of incumbents depend on their in-office deeds, a higher wage might foster performance. In this paper, we use data on all Italian municipalities from 1993 to 2005 and test these hypotheses in a quasi-experimental framework. In Italy, the wage of the mayor depends on population size and sharply changes at different thresholds. We apply a regression discontinuity design on the only threshold that uniquely identifies a wage change (1,000 inhabitants) to control for unobservable town characteristics. The empirical results show that a higher wage attracts more educated candidates, more entrepreneurs and self-employed, but less white and blue collars. At the same time, better-paid politicians are able to raise more external funds, reduce taxes, cut deficit, and increase investments. Exploiting the existence of a two-term limit, we further disentangle the selection from the incentive component of the performance effect, and find that most of it is driven by the higher quality of the elected mayors, rather than by the incentive to be reelected.

In the regression-discontinuity (RD) design, units are assigned to treatment based on whether their value of an observed covariate exceeds a known cutoff. In this design, local polynomial estimators are now routinely employed to construct confidence intervals for treatment effects. The performance of these confidence intervals in applications, however, may be seriously hampered by their sensitivity to the specific bandwidth employed. Available bandwidth selectors typically yield a “large” bandwidth, leading to data-driven confidence intervals that may be severely biased, with empirical coverage well below their nominal target. We propose new, more robust, theory-based con…dence interval estimators for average treatment e¤ects in sharp RD, kink RD, fuzzy RD and fuzzy kink RD designs. Our proposed confidence intervals rely on a recentered RD estimator together with a novel standard-error estimator. For practical implementation, we propose a consistent standard-error estimator that does not require an additional bandwidth choice, as well as valid bandwidth choices compatible with our underlying large-sample theory. In a simulation study, we find that our novel data-driven confidence intervals exhibit close-to-correct empirical coverage and good empirical interval length on average, remarkably improving upon the alternatives available in the literature. We illustrate the performance of our proposed methods with household data from Progresa/Oportunidades, a conditional cash transfer program in Mexico. All the results in this paper are readily available in STATA using our companion package (rdrobust) described in Calonico, Cattaneo, and Titiunik (2013).

Supporters of market-based education reforms argue that school autonomy and between-school competition can raise student achievement. Yet U.S. reforms based in part on these ideas- charter schools, school-based management, vouchers and school choice- are limited in scope, complicating evaluations of their impact. In contrast, a series of remarkable reforms enacted by the Thatcher Government in Britain in the 1980s provide an ideal testing ground for examining the effects of school autonomy and between-school competition. In this paper I study one reform- described by Chubb and Moe (1992) as ‘truly revolutionary ’- that allowed public high schools to ‘opt out ’ of the local school authority and become quasi-independent, funded directly by central Government. In order to opt out schools had to first win a majority vote of current parents, and I assess the impact of school autonomy via a regression discontinuity design, comparing student achievement levels at schools where the vote barely won to those where it barely lost. To assess the effects of competition I use this same idea to compare student achievement levels at neighbouring schools of barely winners to neighbouring schools of barely losers. My results suggest two conclusions. First, there were large gains to schools that won the vote and opted out, on the order of a onequarter

This paper studies the effects of an electronic voting technology that introduced visual aids in Brazilian elections and facilitated voting for the less educated. Estimates exploiting a regression discontinuity design embedded in its phase-in through time indicate that electronic voting reduced residual (error-ridden and uncounted) votes and generated the de facto enfranchisement of a large fraction (11%) of the electorate. This enhanced political participation of less educated (poorer) voters is then shown to have: (1) increased the number of state legislators that are themselves less educated; and (2) shifted government spending towards public health care, a policy that is particularly beneficial to the poor; leading to (3) improved health services utilization (pre-natal visits) by less educated mothers and (4) reduced occurrence of low-weight births in this group. No effects on health care utilization by more educated mothers and on the weight of their newborns are found. The results are consistent with the predictions of political economy models and demonstrate that electronic voting can promote the political empowerment of the poor and raise their living standards.