Objectives

This course is intended for graduate students with an interest in the analysis and evaluation of public policies. The main target audience are students who pursue a career in public sector, international organizations, research institutions or academia; but also for those seek to find employment as a research associate with consulting firms. The course will teach students the theoretical and quantitative concepts needed to evaluate public policies. The emphasis is, however, on application rather than on methods.

Topics

Rationale for policy intervention (recap), cost-benefit analysis/cost-effectiveness Analysis (recap), Roy model, the evaluation-problem, encouragement design, external validity, ethical concerns, field-experiments, natural-experiments (non-technical coverage of difference-in-differences, instrumental variables and regression discontinuity designs), recent trends in public policies in the areas of labor, health, education and social policy.

Meetings

The scheduled meetings (including topic) can be found in the syllabus: pdf-file 

Readings and Slides

• Intro

  • Reading: 1. (Chs. 1 & 2)

  • Slides I  

• Randomized control trials, Rubin Causal Model: 

  • Reading: 1. (Chs. 3 & 4), 2 

  • see Slides I above

• Social Experiments: 

  • Reading: 3.

  • Slides II 

• Difference-In-Differences:

  •  Reading: 1. (Ch. 6), 5.

  • Slides III 

• Regression Discontinuity Design: 

  • Reading: 1. (Ch. 5), 6.

  •  Slides IV

• Instrumental Variable Estimation: 

  • Reading: 7., 8.

  • Slides V

• Sample Issues (e.g. Power Calculations):

  • Reading: 1. (Ch. 11), 9.

  • Slides VI

• External Validity:

  • Reading: 10, 11

  •  Slides VII 

• Political Economy of Public Policy Evaluation

  • Reading: 4. (Ch. 1)

  •  Slides IX  

• Evaluation of Labor Market Policies:

  • Reading: 12., 13.

  • Slides VIII

List of references:

• 1.) Gertler, P.J., Martinez, S. Premand, P. Rawlings, L.B. and Vermeersch, C. M. J. (2011). Impact Evaluation in Practice. Washington, DC: The World Bank. (Link)

• 2.) Angrist, J.D. and Pischke J.-S. (2010). The Credibility Revolution in Empirical Economics: How Better Research Design is Taking the Con out of Econometrics. Journal of Economic Perspectives, 24(2): 3-30. (Link)

• 3.) Heckman, J.J. and Smith, J.S. (1995). Assessing the Case for Social Experiments. Journal of Economic Perspectives, 9(2): 85-110. (Link)

• 4.) Manski, C. (2012). Public Policy in an Uncertain World: Analysis and Decision. Harvard University Press.

• 5.) Card, D.E. and Krueger, A.B. (1994). Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania. American Economic Review. 84(4), 772-793. (Link)

• 6.) Becker, S.O., Egger, P. and von Ehrlich, M. (2010). Going NUTS: The Effect of EU Structural Funds on Regional Performance. Journal of Public Economics, 94(9-10), 578-590.

• 7.) Angrist, J.D. (2005). Instrumental Variables Methods in Experimental Criminological Research: What, Why and How. Journal of Experimental Criminology, 2, 1–22. (Link)

• 8.) Angrist, J.D. and Krueger, A.B. (2001). Instrumental Variables and the Search for Identification: From Supply and Demand to Natural Experiments. Journal of Economic Perspectives, 15(4), 69-85. (Link)

• 9.) Galeman, A. and Weakliem, D. (2009) Of Beauty, Sex and Power. American Scientist, 97(4), 310-316. (link) 

• 10.) Deaton, A. (2010). Instruments, Randomization, and Learning about Development. Journal of Economic Literature 48(2), 424-455. (link)

• 11.) Imbens, G. W. (2010). Better LATE than nothing: Some comments on Deaton (2009) and Heckman and Urzua (2009). Journal of Economic Literature 48(2), 399-423. (link)

• 12.) Holmlund, B. (2014). What Do labor Market institutions Do?. Labour Economics 30(), 62-69.

• 13.) Card, D., Kluve J., Weber, A. (2010). Active Labor Market Policy Evaluations: A Meta-analysis. Economic Journal 120(), F452-477.

Grading and Attendance

Students are expected to read all assigned readings. You find the reading list above, and the time-table in the syllabus informs you on which date which material is covered. Be prepared to answer questions. Further I expect you to read at least the introduction of all articles which will be presented by your fellow students.   

All participants of the course are expected to be present at every appointment. Regular attendance of the Faculty's Empirical Economics and Econometrics Seminar (link to schedule) is highly recommended.

Your grade is determined by a homework (15%), a classroom presentation (20%), an article report (35%), and a short exam (30%). The homework is one page on a media report of your choice. The classroom presentations will take place in the last four meetings and will be scheduled ahead. The article report is due by February 14 and has to be submitted to doris.fischer@uibk.ac.at. Please find more details below.The final exam will take place in the last meeting on January 31.

How to Find an Article?

The article should be published in a peer-reviewed economic journal (see a list of suggest journals below) and focus on an empirical evaluation of a policy/program from one of the four public policy areas:

• Labor policy

• Health policy

• Social policy

• Education policy

The main evaluation method should be one of the following

• Social experiment

• Field experiment

• Natural experiment

  • Difference-in-differences estimator

  • Instrumental variables estimation

  • Regression discontinuity design

  • or a combination of these.

Please send me an email not later than November 9 with a suggestion.  I will check whether your suggested article is suitable, and ensure that we have a sufficient mix of methods across presentations. 

Classroom Presentation and Article Report

Each student has to prepare a classroom presentation of her/his article and write an article report. The classroom presentation (and the article report) should contain:

• a concise statement of the evaluation (outcome, treatment, theory of change, hypothesis)

• a brief discussion of related literature and existing evidence

• a short discussion of the institutional background

• a summary of how the author goes about achieving those goals (data, evaluation method)

• a critical discussion of the identifying assumptions (critiques, praise, open questions)

• a short summary of the results a

  • focus on the main results of the article; do not go over every robustness check & every specification

• a discussion of potential policy implications

The presentation should be 20 minutes. Note, I will enforce a strict time limit. Following each presentation, we will have a 10 minutes discussion (where the audience is asked to focus on the identification and the policy implications). Please fin the schedule here: link

The article report should be 5 pages (i.e. about 2,200 to 2,400 words).

List of Journals

Try to find an article which is published since 2006 (or forthcoming) in one of the following journals:

• General interest (first tier):

  • American Economic Review 

  • Quarterly Journal of Economics

  • Journal of Political Economy

  • Econometrica

  • Review of Economic Studies

• General interest (second tier):

  • American Economic Journal: Applied Economics

  • American Economic Journal: Economic Policy 

  • Economic Journal

  • European Economic Review

  • Journal of the European Economic Association

  • Review of Economics and Statistics

• Leading field journals:

  • Labor: Journal of Labor Economics

  • Health: Journal of Health Economics

  • Public finance: Journal of Public Economics

  • Development: Journal of Development Economics

  • Economic History: Journal of Economic History