Estimados Académicos FEN,

Los invitamos al Seminario Interno FEN que dictará el académico Juan Díaz.

Título: Regression discontinuity designs with coarsened running variables: The e?ect of the free-college tuition policy on students’ dropping out in Chile

Autores: Juan Díaz y Gabriel Villarroel

Resumen: Regression discontinuity designs (RDDs) often use a coarsened version of an underlying continuous running variable, e.g., income coarsened in quantiles, age coarsened in years, or birth weight coarsened in kilograms. If the running variable is coarsened, the traditional approach to RDDs leads to inconsistent treatment effect estimates. Motivated by a case study of the impact of free college tuition on college enrollment and dropout rates in Chile, we propose a new approach to causal inference in RDDs with coarsened running variables. This approach relies on a Local Unconfoundedness Assumption, where observed covariates other than the running variable are crucial for identification and estimation in a neighborhood of the cutoff. This approach facilitates the analyses in presence of intermediate outcome variables, an issue of primary interest in our application. We also discuss the selection of the neighborhood of the cutoff for the analyses. Utilizing a new and unique administrative data set, we estimate the effect of free college tuition on college enrollment and dropping out. We exploit the RDD generated by the fact that students from the 50 percent of the poorest households are eligible to receive the bene?t of free college tuition. Unfortunately, we only observe the decile membership of each student’s household income, a coarsened version of household income. Moreover, two complications are present in our case study: noncompliance in the receipt of the bene?t among eligible students and truncation of the dropout indicator by non-enrollment. Therefore, the effect on dropout rates is meaningful only for that principal stratum defined by students who would enroll in college regardless of whether they are eligible or not. Our analysis reveals that, although there is evidence of a positive effect of the free-tuition policy on enrollment, the impact on dropout rates for the always-enrolled compliers is null.