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Communication Dans Un Congrès Année : 2010

To control or not to control ? Bias of simple matching vs difference-in-difference matching in a dynamic framework

Résumé

In this paper, I examine whether the claim the more control variables, the better holds when matching in a dynamic context. I exhibit two situations where it is better not to control for past outcomes because DID matching is unbiased whereas matching on past outcomes is biased. I study the special case of evaluating a job training program, where both estimators are biased, borrowing a credible selection rule from Heckman, LaLonde, and Smith (1999) and relying on the parameters of the wage process estimated by MaCurdy (1982). I derive closed forms for the bias terms of the two estimators when the error terms are normally distributed, I show that DID matching performs better when used symetrically around the period of enrollment, as implemented by Heckman, Ichimura, Smith, and Todd (1998). Matching is less biased than DID-matching when considering to use the first pre-enrollment period, but symmetric DID-matching is less biased than the less biased matching estimator.
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hal-02595282 , version 1 (15-05-2020)

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Sylvain Chabe-Ferret. To control or not to control ? Bias of simple matching vs difference-in-difference matching in a dynamic framework. 10th World Congress of the Econometric Society, Aug 2010, Shanghai. ⟨hal-02595282⟩
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