The LATE monotonicity assumption of Imbens and Angrist (1994) precludes “defiers,” individuals whose treatment always runs counter to the instrument, in the terminology of Balke and Pearl (1993) and Angrist et al. (1996). I allow for defiers in a model with a binary instrument and a binary treatment. The model is explicit about the randomization process that gives rise to the instrument. I use the model to develop estimators of the counts of defiers, always takers, compliers, and never takers. I propose separate versions of the estimators for contexts in which the parameter of the randomization process is unspecified, which I intend for use with natural experiments with virtual random assignment. I present an empirical application that revisits Angrist and Evans (1998), which examines the impact of virtual random assignment of the sex of the first two children on subsequent fertility. I find that subsequent fertility is much more responsive to the sex mix of the first two children when defiers are allowed.
20 March 2019
Working Paper (CWP12/19)