Jj. Heckman et Ja. Smith, The pre-programme earnings dip and the determinants of participation in a social programme. Implications for simple programme evaluation strategies, ECON J, 109(457), 1999, pp. 313-348
The key to estimating the impact of a programme is constructing the counter
factual outcome representing what would have happened in its absence. This
problem becomes more complicated when agents, such as individuals, firms or
local governments, self-select into the programme rather than being exogen
ously assigned to it. This paper uses data from a major social experiment t
o identify what would have happened to the earnings of self-selected partic
ipants in a job training programme had the!: not participated in it. We inv
estigate the implications of these earnings patterns for the validity of wi
dely-used before-after and difference-in-differences estimators.