Invites you to a

Microeconometrics & Public Policy seminar presented by

Gawain Heckley

(Lund University) 

Inequality Impacts of Raising Minimum Years of Schooling

Friday, 24 March

12.00pm – 1.00pm

While it is widely acknowledged that a policy’s impact on the distribution of outcomes is crucial, the methods currently available for estimating the impact on distributions are limited due to their restrictive assumptions, complexity, or inability to move beyond marginal effects. In this paper, we present a new, flexible method for estimating the impact on the parameters of the distribution that can be expressed as raw moments, such as the variance (E[Y2]−E[Y]2) of outcome Y and the covariance (E[YH]−E[Y]E[H]) of two outcomes Y and H. Our approach involves predicting the observed and counterfactual values for each expectation (E(Y2),E(Y),E(YH),E(H)) using standard causal regressions. We then combine these predictions to estimate a policy’s impact on the parameters of interest. Our new approach is just as good as existing approaches under selection on observables. To demonstrate the effectiveness of our method, we go beyond the limits of current approaches and extend the analysis to a difference-in-differences set-up with a major Swedish reform that increased the minimum years of schooling. Our results show that this reform reduced the variance in years of schooling. Moving forward, we plan to estimate the impact of this reduction in education inequality on the variance of labour income between 30-40-year-olds and the covariance of earned labour income and mortality.

For further information contact: Microeconometrics & Public Policy Seminar Coordinator Dr Gregor Pfeifer (gregor-gabriel.pfeifer@sydney.edu.au)

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