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IFAU - Institute for Evaluation of Labour Market and Education Policy Working Paper Series
IFAU - Institute for Evaluation of Labour Market and Education Policy

No 2002:2:
Removing the veil of ignorance in assessing the distributional impacts of social policies

Pedro Carneiro, Karsten T Hansen and James J Heckman

Abstract: This paper summarizes our recent research on evaluating the distributional consequences of social programs. This research advances the economic policy evaluation literature beyond estimating assorted mean impacts to estimate distributions of outcomes generated by different policies and determine how those policies shift persons across the distributions of potential outcomes produced by them. Our approach enables analysts to evaluate the distributional effects of social programs without invoking the "Veil of Ignorance" assumption often used in the literature in applied welfare economics. Our methods determine which persons are affected by a given policy, where they come from in the ex-ante outcome distribution and what their gains are. We apply our methods to analyze two proposed policy reforms in American education. These reforms benefit the middle class and not the poor.

Keywords: social programs; welfare economics; (follow links to similar papers)

JEL-Codes: I28; (follow links to similar papers)

32 pages, January 20, 2002

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This paper is published as:
Carneiro, Pedro, Karsten T Hansen and James J Heckman, (2001), 'Removing the veil of ignorance in assessing the distributional impacts of social policies', Swedish Economic Policy Review, Vol. 8, No. 2, pages 273-301



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