ERIC Number: ED465824
Record Type: Non-Journal
Publication Date: 2002-Jan-20
Reference Count: N/A
Removing the Veil of Ignorance in Assessing the Distributional Impacts of Social Policies.
Carneiro, Pedro; Hansen, Karsten T.; Heckman, James J.
This paper summarizes research on evaluating the distributional consequences of social programs, presenting the evaluation problem for an economy with two sectors (e.g., schooled and unschooled) where agents select or are selected into treatment (one of the two sectors). It considers policies affecting choices of treatment but not potential outcomes (the outcomes they experience under different treatments) and compares outcomes across two policy regimes that affect treatment choices. This task is easier when individuals respond in the same way to treatment than when they differ in their response and act on those differences in making treatment choice decisions. In the latter case, the marginal entrant into schooling is not the same as the average participant in treatment, and the representative agent paradigm breaks down. The paper estimates the distributional consequences of two proposed policy reforms in U.S. education. Even though they barely affect the overall distribution of outcomes, and would be judged equivalent to the pre-policy origin state under the Veil of Ignorance criterion, they have substantial effects on a small group of people concentrated in the middle to high end of the pre-policy wage distribution. An appendix shows how to generate the counterfactual distributions of outcomes produced by alternative policies. (Contains 23 references.)(SM)
Publication Type: Reports - Evaluative
Education Level: N/A
Sponsor: National Science Foundation, Arlington, VA.; American Bar Association, Chicago, IL.; Donner (William H.) Foundation.; Calouste Gulbenkian Foundation, Lisbon (Portugal).
Authoring Institution: N/A