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In: Children and youth services review: an international multidisciplinary review of the welfare of young people, Volume 33, Issue 11, p. 2290-2296
ISSN: 0190-7409
In: American economic review, Volume 111, Issue 12, p. 4088-4118
ISSN: 1944-7981
We present a new estimator for causal effects with panel data that builds on insights behind the widely used difference-in-differences and synthetic control methods. Relative to these methods we find, both theoretically and empirically, that this "synthetic difference-in-differences" estimator has desirable robustness properties, and that it performs well in settings where the conventional estimators are commonly used in practice. We study the asymptotic behavior of the estimator when the systematic part of the outcome model includes latent unit factors interacted with latent time factors, and we present conditions for consistency and asymptotic normality. (JEL C23, H25, H71, I18, L66)
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