Methods for evaluating the impact of education policies when the return to education varies across individuals

In this paper I summarize some recent developments in the literature on the econometrics of program evaluation. In particular, I consider the estimation ofmean and distributional treatment effects when the impact of the program varies across individuals. I focus the exposition on the study of the returns to education (therefore, education is the program being considered). I provide examples of twosets of papers that illustrate the theoretical and practical importance of accounting for heterogeneity in program evaluation. The research summarized in this paper has general applicability. It is not limited to the study of education. Instead of education (as the “program” being considered) we could use the framework to analyze job training, unionism, migration, medical care, and other types of programs.