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Bounds on Treatment Effects in Regression Discontinuity Designs with a Manipulated Running Variable

Author

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  • François Gerard
  • Miikka Rokkanen
  • Christoph Rothe
Abstract
The key assumption in regression discontinuity analysis is that the distribution of potential outcomes varies smoothly with the running variable around the cutoff. In many empirical contexts, however, this assumption is not credible; and the running variable is said to be manipulated in this case. In this paper, we show that while causal effects are not point identified under manipulation, they remain partially identified under a general model that covers a wide range of empirical patterns. We derive sharp bounds on causal parameters for both sharp and fuzzy designs under our general model, and show how additional structure can be used to further narrow the bounds. We use our methods to study the disincentive effect of unemployment insurance on (formal) reemployment in Brazil, and show that our bounds remain informative, despite the fact that manipulation has a sizable effect on our estimates of causal parameters.

Suggested Citation

  • François Gerard & Miikka Rokkanen & Christoph Rothe, 2016. "Bounds on Treatment Effects in Regression Discontinuity Designs with a Manipulated Running Variable," NBER Working Papers 22892, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:22892
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    More about this item

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings

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