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Testing for Rank Invariance or Similarity in Program Evaluation

Abstract This paper discusses testable implications of rank invariance or rank similarity, assumptions that are common in program evaluation and in the quantile treatment effect (QTE) literature. We nonparametrically identify, estimate, and test the counterfactual distribution of potential ranks, or features of the distribution. The proposed tests allow treatment to be endogenous, with exogenous treatment following as a special case. The tests essentially do not require any additional assumptions other than those to identify and estimate QTEs. We apply the proposed tests to investigate whether the Job Training Partnership Act training causes trainees to systematically change their ranks in the earnings distribution.