Economics Research Seminar Series: Wooyong Lee

Differences-in-differences with dynamic treatment decisions. Dr. Wooyong Lee, UTS. 

This paper studies differences-in-differences (DID) models that allow the agents to endogenously enter treatment in response to the time-variation of their potential outcomes, permitting the well-known Ashenfelter's dip phenomenon (Ashenfelter, 1978). I show that, in this model, the parallel-trend-type assumptions have no identifying power in learning about various average treatment effects, including the average treatment effect of the treated. I then show that, under additional assumptions on how the potential outcomes change over time, some average treatment effects are partially identified. I propose an estimation and inference procedure for the partially identified average treatment effects, whose finite-sample performance is examined by simulations. 

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