dorsal/arxiv
View SchemaEstimating Treatment Effects in Panel Data Without Parallel Trends
| Authors | Shoya Ishimaru |
|---|---|
| Categories | |
| ArXiv ID | 2601.08281vv1 |
| URL | https://arxiv.org/abs/2601.08281 |
| License | http://arxiv.org/licenses/nonexclusive-distrib/1.0/ |
Abstract
This paper proposes a novel approach for estimating treatment effects in panel data settings, addressing key limitations of the standard difference-in-differences (DID) approach. The standard approach relies on the parallel trends assumption, implicitly requiring that unobservable factors correlated with treatment assignment be unidimensional, time-invariant, and affect untreated potential outcomes in an additively separable manner. This paper introduces a more flexible framework that allows for multidimensional unobservables and non-additive separability, and provides sufficient conditions for identifying the average treatment effect on the treated. An empirical application to job displacement reveals substantially smaller long-run earnings losses compared to the standard DID approach, demonstrating the framework's ability to account for unobserved heterogeneity that manifests as differential outcome trajectories between treated and control groups.
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"abstract": "This paper proposes a novel approach for estimating treatment effects in panel data settings, addressing key limitations of the standard difference-in-differences (DID) approach. The standard approach relies on the parallel trends assumption, implicitly requiring that unobservable factors correlated with treatment assignment be unidimensional, time-invariant, and affect untreated potential outcomes in an additively separable manner. This paper introduces a more flexible framework that allows for multidimensional unobservables and non-additive separability, and provides sufficient conditions for identifying the average treatment effect on the treated. An empirical application to job displacement reveals substantially smaller long-run earnings losses compared to the standard DID approach, demonstrating the framework\u0027s ability to account for unobserved heterogeneity that manifests as differential outcome trajectories between treated and control groups.",
"arxiv_id": "2601.08281",
"authors": [
"Shoya Ishimaru"
],
"categories": [
"econ.EM"
],
"license": "http://arxiv.org/licenses/nonexclusive-distrib/1.0/",
"title": "Estimating Treatment Effects in Panel Data Without Parallel Trends",
"url": "https://arxiv.org/abs/2601.08281",
"version": "v1"
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