A common problem with differences-in-differences (DD) estimates is the failure of the parallel-trend assumption. To cope with this, most authors include polynomial (linear, quadratic…) trends among the regressors, and estimate the treatment effect as a once-in-a-time trend shift. In practice...

The rising cost of old-age dependency in Europe and elsewhere invariably leads to reforms aimed at raising the effective age or retirement. But do older individuals have the health/cognitive capacity to work longer? Following Cutler et al. (2012), this paper asks how much older individuals could...

Imagine a region suffering from a widening income gap that becomes eligible for a generous transfer programme (the treatment). Imagine difference-in-differences analysis (DD) — a before-and-after comparison of the income-level difference — shows that the handicap has risen. Most observers...