Scandinavian Working Papers in Economics

Working Papers,
Lund University, Department of Economics

No 2025:4: Taking an Extra Moment to Consider Treatment Effects on Distributions

Gawain Heckley () and Dennis Petrie ()
Additional contact information
Gawain Heckley: Centre for Economic Demography, Lund University, Postal: School of Economics and Management, S-220 07 Lund, Sweden
Dennis Petrie: Monash Business School, Monash University, Postal: Level 5 Building H, Caulfield, Victoria 3145, Australia

Abstract: This paper introduces Parameter Estimation by Raw Moments (PERM), a flexible method for evaluating a policy’s impact on the parameters of an outcome distribution. Such parameters include the variance, skewness and covariance of two outcomes. PERM simplifies distributional analysis by first separately estimating higher-order moment treatment effects, then combining these to derive distribution parameter treatment effects. Two implementations are discussed: regression with controls and DiD with staggered roll-out. Applying PERM DiD to a Swedish school reform finds it reduced education inequality but increased earnings variance resulting in a lower covariance between education and earnings.

Keywords: Causal Inference; Policy Evaluation; Distribution Impacts; Income Inequality; Education Inequality

JEL-codes: C10; I24; I26

Language: English

67 pages, March 28, 2025

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