Master in Applied Labour Economics for Development- Module C

This course aims at providing MALED students with a basic statistical toolbox that includes:

• Random variables and probability distributions;
• Expected value, mean and variance;
• Random sampling and distribution of the sample mean;
• Hypotheses testing and confidence intervals.

Morning traditional classes will be paralleled in the afternoon by computer labs, where some exercises will be solved using the statistical software Stata.

The course aims to provide students with knowledge of the basic tools in econometrics. The topics covered include estimation and test of hypotheses in linear regression (with single and multiple regressors), panel data, limited (binary, censored and truncated) dependent variable models and Instrumental Variable estimation. The classes are complemented by lab session where real data are analysed with the help of the Stata econometric software.

The course is intended to deepen the knowledge of econometrics students have acquired in the "Basic fundamentals in econometrics" course. The topics covered include panel data, limited (binary, censored and truncated) dependent variable models and Instrumental Variables estimation. The classes are complemented by lab session where real data are analysed with the help of the Stata econometric software.

The course will deal with:

• Conceptual issues, which will focus on causal effect, definition of outcome, counterfactual and controls;
• Managing impact evaluation, in particular data collection, planning, policy test and roll-out.

The methods discussed and formalized will be:

• randomized experiments;
• matching;
• diff in diffs;
• instrumental variables;
• regression discontinuity design.

The classes will be complemented by lab sessions where real data are analysed with the help of the Stata econometric software, and by group work discussing real projects and proposing IE strategies.

This module aims to introduce the participants to the basic concepts, theories and tools that may be applied to the analysis and management of projects and policies. The emphasis is on the policy use of the techniques.

Content:

1. Why and how of CBA:

• Presentation of the technique in its broad policy context
• Emphasis on the difference between financial and economics CBA
• Discuss the potential use of the technique and its limits
• CBA vs other techniques (multicriteria analysis, cost-effectiveness, , other);
• Brief overview of their use in international organizations and OECD governments

2. CBA techniques and policy implications

• Overview of techniques used to assess costs and benefits
• Discussion of the relevance of the discount rate
• Discussion of the match between techniques used to assess benefits and cost and their use with policy and project financing options.

3. Ex-post vs Ex-ante CBA

• Examples to learn how to Interpret evaluations
• Brief overview of their use in international organizations and OECD governments

4. Risk and Uncertainty

• The different concepts
• Their uses and Their limits

5. Public vs private evaluation of projects

• The concepts again
• The heterogeneity in their use
• How CBA users …lie with CBA

The object of the course is to introduce the students to the use of micro-simulations for the study of tax benefit systems, pension systems and the labour market, when the focus is on distributive issues and on policy design and ex-ante policy evaluation.

The course will discuss the basic components of a microsimulation both from a theoretical and practical point of view, and in particular:

• The building of a baseline, synthetic population representative of the policy target;
• The implementation of normative rules and policy scenario parameters;
• The implementation of individual behaviours according to the empirical evidence.

Other topics that will be discussed include the distinction between static vs. dynamic simulations, accounting vs. behavioural simulations, inferential aspects of simulation models, their connection with other agent-based modelling strategies, and the main software packages that can be used to support the implementation microsimulation models.