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Regression discontinuity (RD) models are commonly used to nonparametrically identify and estimate a local average treatment effect. Dong and Lewbel (2015) show how a derivative of this effect, called treatment effect derivative (TED) can be estimated. We argue here that TED should be employed in most RD applications, as a way to assess the stability and hence external validity of RD estimates. Closely related to TED, we define the complier probability derivative (CPD). Just as TED measures stability of the treatment effect, the CPD measures stability of the complier population in fuzzy designs. TED and CPD are numerically trivial to estimate. We provide relevant Stata code, and apply it to some real datasets.

While there exist many surveys on the use stochastic frontier analysis (SFA), many important issues and techniques in SFA were not well elaborated in the previous surveys, namely, regular models, copula modeling, nonparametric estimation by Grenander’s method of sieves, empirical likelihood and causality issues in SFA using regression discontinuity design (RDD) (sharp and fuzzy RDD). The purpose of this paper is to encourage more research in these directions.

A literature survey.

While there are many useful applications of SFA to econometrics, there are also many important open problems.

This is the first survey of SFA in econometrics that emphasizes important issues and techniques such as copulas.

Unemployment can negatively affect individuals, their families and communities in various ways. When individuals are out of work may experience mental and physical health problems, material deprivation and poverty. This study aims to examine the impact of unemployment benefits on health and living standards in Turkey.

The authors employ a structural equation modelling (SEM) to consider the simultaneous relationships among the unemployment benefits and the latent variables of health and Standard of Living (SoL). We propose a fuzzy Regression Discontinuity Design (FRDD) and a Regression Kink Design (RKD) within the SEM framework to infer causality. For the empirical analysis, the authors employ the panel Income and Living Conditions Survey (ILCS) in 2007–2015.

The authors’ findings suggest that those who receive these benefits are more likely to report higher levels of health and improve their living standards compared to the non-recipients. Furthermore, unemployment benefits replacement rates are associated with improved levels in health and living standards. The authors’ results indicate a substantial heterogeneity on the impact of unemployment benefits since males, low educated individuals and those belonging to the lower levels of income are affected more in terms of their health status and living standards.

The majority of earlier studies have focused on the impact of unemployment benefits on labor outcomes. The originality of this study is that we implement the FRDD and RKD within the SEM framework to explore, simultaneously, the impact of unemployment insurance on health and living standards. Moreover, future research studies can implement this framework to infer causality and explore the impact of related policies and reforms.

The purpose of this paper is to examine the effects of school attendance on learning and child labour in Ghana.

The paper uses a nationally representative sample of household and individual data in 2005/06 and 2011/12 for the analysis. Regression discontinuity, the capitation grant in 2005 as exogenous, is used to estimate the impact of school attendance on child labour and learning outcomes.

The study found that children who were exposed to the capitation grant spent more hours in school and were more likely to enrol in primary school. School attendance was found to increase the likelihood to read and write a standardised test in English. Also, the improvement in children’s school attendance was found to enhance the likelihood of performing a written calculation. The authors could not find any evidence that school attendance affected child labour.

This research is the first causality analysis in sub-Saharan Africa that uses a nationally representative dataset to study the impact of school attendance on child labour and learning outcomes using a regression discontinuity estimator to deal with endogeneity issues.

With an increasing number of Chinese private firms establishing primary level CPC Party committees, it is important to study the role of Party organizations in these firms. Using a nationwide survey of private firms in 2006, we empirically study the firm-level CCP committee's effect on workers' benefits and firm performance.

To overcome the potential endogeneity, we employ the regression discontinuity approach by utilizing the following rule from the Constitution of the CCP: Primary party committees should be established in any basic work unit with more than 3 full party members.

Our empirical results show that party committees in private firms have positive and statistically significant effects on many types of workers' benefits, including pension, unemployment insurance and workplace safety.

This paper highlights CCP committees as an important alternative mechanism in coordinating labor relationships in China when formal labor protecting institutions are weak.

Even though Europe has recently undergone a difficult time and is recovering from the aftermath of prevalent unemployment, immigrants are still flocking towards Europe and taking up citizenships of their host countries through naturalisation. The purpose of this paper is to look at the how naturalised immigrants fare in terms of income and employment chances, compared to immigrants.

Using a fuzzy regression discontinuity design and the 2008 European Values Study integrated data set with a final sample of 4,460 observations, this paper isolates the causal effect of naturalisation on the income and employment chances of immigrants by exploiting exogenous variations generated by the eligibility rules for naturalisation in 41 European countries.

Main findings show that the probability of being naturalised increases for eligible immigrants, income and employment chances increase for eligible immigrants, and income and employment chances increase for naturalised immigrants.

This study has a data limitation, where in using the discontinuity design, there is an unbalanced number of observations to the left and right of the design’s threshold value.

There are limited studies using causal models or potential outcome frameworks to examine the effect of immigrant naturalisation on labour market outcomes in Europe. This study fills this gap.

This chapter studies the effect of increasing formality via tax reduction and simplification schemes on micro-firm performance. We develop a simple theoretical model that yields two intuitive results. First, low- and high-ability entrepreneurs are unlikely to be affected by a tax reduction and therefore, the reduction has an impact only on a segment of the micro-firm population. Second, the benefits to such reduction, as measured by profits and revenues, are increasing in the entrepreneur's ability. Then, we estimate the effect of formality on the entire conditional distribution (quantiles) of revenues using the 1996 Brazilian SIMPLES program and a rich survey of formal and informal micro-firms. The econometric approach compares eligible and non-eligible firms, born before and after SIMPLES in a local interval about the introduction of SIMPLES. We develop an estimator that combines both quantile regression and the regression discontinuity design. The econometric results corroborate the positive effect of formality on micro-firms’ performance and produce a clear characterization of who benefits from these programs.

The role of increased schooling on teenage childbirth has been expansively studied especially in developed countries. However, caveats remain in the case of low-income countries especially Sub-Saharan Africa. The purpose of this paper is to ascertain the impact of increased schooling on the probability of first childbirth at 15 years or younger, 16-17, 18-19, and 20 years or older, in the important context of Uganda – a country with one of the highest adolescent fertility rates in Africa.

The empirical analysis uses recent data from the nationally representative Demographic and Health Survey for Uganda conducted in 2011. The authors then adopt a fuzzy regression discontinuity design, estimated using instrumental variables techniques that exploit the exogenous change in schooling impelled by the universal primary education policy enacted in 1997 in Uganda. The empirical approach compares the fertility outcomes for women born in 1984-1992 (i.e. exposed to the policy) to those born in 1973-1981 (i.e. non-exposed).

The authors find that a one-year increase in schooling lowers the probability of first childbirth at age the age of 15 years or younger, 16-17, 18-19, and 20 years or older by nearly 8.2, 9.2, 9.4, and 9.5 percentage points, respectively. Also, pathways through which education impacts teenage motherhood included information access through the media, increased literacy, prenatal care utilization, marital status, and unhealthy sexual behavior.

The paper uses nationally representative survey data to scrutinize the causal influence of schooling on the probability of first childbirth using the 1997 universal primary education in Uganda as a natural experiment to identify the impact of schooling. The study recommends that expanding primary schooling opportunities for girls may be an effective strategy toward accelerated reductions in teenage fertility in Uganda.

The purpose of this paper is to examine the relative academic effectiveness of vocational education in three countries with early tracking systems: Austria, Croatia, and Hungary.

The authors use an instrumental variables approach to estimate vocational education’s relative academic effectiveness in terms of achievement on an international test, the Organization for Economic Cooperation and Development’s Program of International Student Assessment (PISA), and two possible indicators of non-cognitive outcomes – self-efficacy in mathematics and intrinsic motivation in mathematics, both also available from the PISA student survey.

The results show few, if any, differences in student gains from attending the vocational track in secondary school as opposed to the academic track. Specifically, the results show that attending the vocational or academic track results in similar achievement gains in the tenth grade and generally similar gains in self-efficacy and motivation in mathematics.

The study is unique because in the three countries, the authors can use a fuzzy regression discontinuity approach based on school systems’ age entrance date rules to estimate the gain in test scores over an academic year and to compare the gain for students in the vocational and academic tracks. The results contradict almost all other studies by showing that in these countries student academic gains in vocational education are about the same as in the academic track.