Welfare Analysis of Changing Notches : Evidence from Bolsa Família
This paper develops a framework to bound the welfare impacts of reforms to notches using two sufficient statistics: (1) the number of households bunching at the old notch who move toward the new notch, and (2) the number of households who “jump” do...
| Main Authors: | , , |
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| Format: | Working Paper |
| Language: | English en_US |
| Published: |
Washington, DC : World Bank
2022
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/099711507052235480/IDU0f69873ca0eb3b0492f0b2040865d6808f430 http://hdl.handle.net/10986/37647 |
| Summary: | This paper develops a framework to
bound the welfare impacts of reforms to notches using two
sufficient statistics: (1) the number of households bunching
at the old notch who move toward the new notch, and (2) the
number of households who “jump” down to the new notch. The
bounds hold in a wide class of models, highlighting a new
way to use reduced-form bunching evidence for welfare
analysis without strong assumptions on the economic
environment. These two statistics are estimated using a
difference-in-difference strategy for a reform to the
anti-poverty program Bolsa Famılia, finding that the
reform’s marginal value of public funds lies between 0.90
and 1.12. |
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