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Speaker: Fulvia Pennoni (Università degli Studi Milano-Bicocca)

Title: A causal latent transition model: evidence from evaluating human capital development

Abstract:

A new causal transition model with multivariate outcomes to account for unobserved heterogeneity is introduced. It is formulated according to potential versions of discrete latent variables representing the individual characteristic of interest. It can be considered as an alternative method to the Difference-in-Difference approach to evaluate the effect of a policy or treatment with pre- and post-treatment outcomes. Maximum likelihood estimation of the model parameters can be implemented relatively simply. The proposal is illustrated through simulation results and an application concerning the effect of programs developed in Italy on pupils in the 6th and 7th grades in order to improve non-cognitive skills.

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