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The Oaxaca–Blinder Unexplained Component as a Treatment Effects Estimator

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Keywords
  • C21 - Cross-Sectional Models
  • Spatial Models
  • Treatment Effect Models
  • Quantile Regressions
  • J24 - Human Capital
  • Skills
  • Occupational Choice
  • Labor Productivity

Abstract

In this paper I use the National Supported Work (NSW) data to examine the finite-sample performance of the Oaxaca–Blinder unexplained component as an estimator of the population average treatment effect on the treated (PATT). Precisely, I follow sample and variable selections from Dehejia and Wahba (1999), and conclude that Oaxaca–Blinder performs better than any of the estimators in this influential paper, provided that overlap is imposed. As a robustness check, I consider alternative sample (Smith and Todd 2005) and variable (Abadie and Imbens 2011) selections, and present a simulation study which is also based on the NSW data.

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