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This essay reviews progress in empirical economics since Leamer’s (1983) critique. Leamer highlighted the benefits of sensitivity analysis, a procedure in which researchers show how their results change with changes in specification or functional form. Sensitivity analysis has had a salutary but not a revolutionary effect on econometric practice. As we see it, the credibility revolution in empirical work can be traced to the rise of a design-based approach that emphasizes the identification of causal effects. Design-based studies typically feature either real or natural experiments and are distinguished by their prima facie credibility and by the attention investigators devote to making the case for a causal interpretation of the findings their designs generate. Design-based studies are most often found in the microeconomic fields of Development, Education, Environment, Labor, Health, and Public Finance, but are still rare in Industrial Organization and Macroeconomics. We explain why IO and Macro would do well to embrace a design-based approach. Finally, we respond to the charge that the design-based revolution has overreached.

Growing concerns over the inadequate achievement of U.S. students have led to proposals to reward good teachers and penalize (or fire) bad ones. The leading method for assessing teacher quality is “value added” modeling (VAM), which decomposes students ’ test scores into components attributed to student heterogeneity and to teacher quality. Implicit in the VAM approach are strong assumptions about the nature of the educational production function and the assignment of students to classrooms. In this paper, I develop falsification tests for three widely used VAM specifications, based on the idea that future teachers cannot influence students ’ past achievement. In data from North Carolina, each of the VAMs’ exclusion restrictions is dramatically violated. In particular, these models indicate large “effects” of fifth grade teachers on fourth grade test score gains. I also find that conventional measures of individual teachers ’ value added fade out very quickly and are at best weakly related to long-run effects. I discuss implications for the use of VAMs as personnel tools.

This paper studies the effects of an electronic voting technology that introduced visual aids in Brazilian elections and facilitated voting for the less educated. Estimates exploiting a regression discontinuity design embedded in its phase-in through time indicate that electronic voting reduced residual (error-ridden and uncounted) votes and generated the de facto enfranchisement of a large fraction (11%) of the electorate. This enhanced political participation of less educated (poorer) voters is then shown to have: (1) increased the number of state legislators that are themselves less educated; and (2) shifted government spending towards public health care, a policy that is particularly beneficial to the poor; leading to (3) improved health services utilization (pre-natal visits) by less educated mothers and (4) reduced occurrence of low-weight births in this group. No effects on health care utilization by more educated mothers and on the weight of their newborns are found. The results are consistent with the predictions of political economy models and demonstrate that electronic voting can promote the political empowerment of the poor and raise their living standards.

Do students benefit from compulsory schooling? In an important article, Oreopoulos (2006) studied the 1947 British compulsory schooling law change and found large returns to schooling of about 15 % using the General Household Survey (GHS). We reanalyse this dataset and find much smaller returns of about 3 % on average. In fact, there is no evidence of any positive return for women and the return for men is in the 4-7 % range. Additionally, we utilize the New Earnings Survey Panel Data-set (NESPD) that has earnings information superior to that in the GHS and find instrumental variables estimates that are very similar: zero returns for women and returns of about 3 to 4 % for men. The authors acknowledge the Office for National Statistics (ONS) for granting access to the NESPD and the ONS and the Economic and Social Data Service (ESDS) for access to the General Household Survey data. Devereux gratefully acknowledges financial support

Programs that link substantial amounts of college financial aid to student achievement have proved increasingly popular in recent years. These programs could work either by relaxing financial constraints or by inducing additional student effort (or both). I examine the PROMISE scholarship in West Virginia, which provides free tuition and fees to college students who maintain a minimum GPA and course load. Using an unusually comprehensive administrative database, I exploit discontinuities in both the eligibility formula and the timing of implementation to identify program effects. I find robust and statistically significant impacts on key academic outcomes, including a 6.7 percentage point increase in four-year BA completion rates among PROMISE recipients. Impacts are concentrated at the precise thresholds for annual scholarship renewal—particularly the minimum course load requirement—and disappear in the fourth year of college when students are still receiving the scholarship but no longer have the opportunity to renew. The findings suggest that the program works by establishing clear academic goals and

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This paper uses exogenous variation in electoral rules to test the predictions of strategic voting models and the causal validity of Duverger’s Law. Estimations based on a regression discontinuity design in the assignment of single-ballot and dual-ballot (runoff) electoral systems in Brazilian mayoral races indicate that, in accordance to Duverger’s Law, single-ballot plurality rule causes voters to desert third placed candidates and vote for the two most popular ones. I find that the effects are stronger in close elections, and that candidates ‘ characteristics and entry cannot account for the results, suggesting that strategic voting is the driving force behind these findings.

The regression-discontinuity (RD) design has experienced a resurgence of interest in many fields, including political science. Following David Lee’s pioneering work on the incumbency advantage in U.S. House elections, many scholars have begun to apply RD designs to popular elections. Under certain assumptions, the RD design yields causal estimates that approach the gold standard of randomized experiments. There are good reasons to believe, however, that outcomes of narrowly decided U.S. Congressional elections are anything but random. Consistent with this notion, we demonstrate that bare winners and bare losers in U.S. House elections exhibit dramatic differences on key pretreatment covariates. Bare winners have substantially more financial resources than candidates who just lose and are far more likely to belong to the party that won the previous election in the district. Congressional Quarterly’s pre-election race ratings predict the outcomes of even extremely close elections with a high degree of accuracy. Close House elections are so predictable that it is impossible to achieve covariate balance between matched treated and control observations. We show that post-election recounts do not change election results often enough to account for the large imbalances in pre-election covariates that we observe. We conclude that bare winners and bare losers in U.S. House elections are not exchangeable ex ante. Therefore, the RD design is not valid in the case of U.S. House elections,

The Centre for Market and Public Organisation (CMPO) is a leading research centre, combining expertise in economics, geography and law. Our objective is to study the intersection between the public and private sectors of the economy, and in particular to understand the right way to organise and deliver public services. The Centre aims to develop research, contribute to the public debate and inform policy-making. CMPO, now an ESRC Research Centre was established in 1998 with two large