Paper 1: A Reweighting Approach for Regression Discontinuity Designs with Discontinuous Density of the Running Variable
Abstract: In the Regression Discontinuity (RD) design, discontinuities in the density function of the running variable may harm identification and bias estimations as in the manipulation and heaping cases. This paper proposes a new robust approach that consistently estimates the Average Treatment Effect near the cutoff under discontinuities in the distribution function of the running variable. The approach consists of sample-reweighting the outcome prior to the estimation of the causal effect. This paper also discusses the limitations of existing indirect tests about the validity of the RD estimation results and presents sufficient conditions for identification that are directly linked to those tests. Simulated examples are presented to assess the finite sample performance of the proposed approach, while non-simulated examples use real data and compare to existing correction methods that partially identify the effect. The Reweighted-RD design applies to any setting with or without discontinuities in the conditional or marginal distributions while maintaining all the distinctive features of the conventional RD design.
Paper 2: Effects of a Reduction in Credit Constraints on Educational Attainment: Evidence from Chile
Abstract: This paper analyzes the enrollment and retention effects of a student loan reform that loosened credit constraints in Chile. The reform reduced the interest rate from an average of 6 percent to a fixed rate of 2 percent. The identification strategy follows a Difference-in-difference approach that compares the e↵ects of this policy change among eligible and ineligible students. We find a precise null e↵ect of the reform on the overall immediate enrollment, along with a diversion effect that increased enrollment to universities in 2.5 percentage points (pp.) (7 percent), while enrollment to vocational institutions dropped in 2.5 pp. (14 percent). Moreover, we find that for female students the decrease in enrollment to vocational institutions is not fully offset by the increase in enrollment to universities. We also find that the reform increased university retention by 3 percent in two-year enrollment and reduced by 10 percent the dropout rate. Our findings are mainly driven by medium-income-family students.