The purpose of this essay is to discuss two approaches to inference, and how "human capital" can provide a way to combine them. The first approach, ubiquitous in economics, is based upon the Rubin/Holland potential outcomes model and relies upon randomized treatment to measure the causal effect...

We study inference in shift-share regression designs, such as when a regional outcome is regressed on a weighted average of observed sectoral shocks, using regional sector shares as weights. We conduct a placebo exercise in which we estimate the effect of a shift-share regressor constructed with...

This paper develops an alternative approach to the widely used Difference-In-Difference (DID) method for evaluating the effects of policy changes. In contrast to the standard approach, we introduce a nonlinear model that permits changes over time in the effect of unobservables (e.g., there may...

An important practical objective of empirical studies of treatment response is to provide decision makers with information useful in choosing treatments. Often the decision maker is a planner who must choose treatments for the members of a heterogeneous population; for example, a physician may...

This paper discusses the definition and identification of external treatment effects and experimental designs capable of detecting these effects. External effects occur when the outcome of a given individual is affected by the treatment assignments of other individuals. The paper argues that...

This paper uses the information contained in the joint dynamics of households' labor earnings and consumption-choice decisions to quantify the nature and amount of income risk that households face. We accomplish this task by estimating a structural consumption-savings model using data from the...

Since the advent of heteroskedasticity-robust standard errors, several papers have proposed adjustments to the original White formulation. We replicate earlier findings that each of these adjusted estimators performs quite poorly in finite samples. We propose a class of alternative...

We describe a framework for empirical welfare analysis that uses the causal estimates of a policy’s impact on net government spending. This framework provides guidance for which causal effects are (and are not) needed for empirical welfare analysis of public policies.The key ingredient is the...

This paper considers the problem of conducting inference on the regression coefficient in a bivariate regression model with a highly persistent regressor. Gaussian power envelopes are obtained for a class of testing procedures satisfying a conditionality restriction. In addition, the paper...