Discussion paper

DP18995 Identification of Marginal Treatment Effects using Subjective Expectations

We develop a method to identify the individual latent propensity to select into treat- ment and marginal treatment effects. Identification is achieved with survey data on individuals’ subjective expectations of their treatment propensity and of their treatment-contingent outcomes. We use the method to study how child birth affects female labor supply in Denmark. We find limited latent heterogeneity and large short-term effects that vanish by 18 months after birth. We support the validity of the identifying assump- tions in this context by using administrative data to show that the average treatment effect on the treated computed using our method and traditional event-study methods are nearly equal. Finally, we study the effects of counterfactual changes to child care cost and quality on female labor supply.


Briggs, J, A Caplin, S Leth-Petersen and C Tonetti (2024), ‘DP18995 Identification of Marginal Treatment Effects using Subjective Expectations‘, CEPR Discussion Paper No. 18995. CEPR Press, Paris & London. https://cepr.org/publications/dp18995