mlsanityData to 7 Oct 2026

Bootstrapping with AI/ML-generated labels

arXiv 2604.23770 ↗First posted 26 Apr 2026econ.EM stat.MLcited by 0

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Abstract (arXiv)

AI/ML methods are increasingly used in economics to generate binary variables (or labels) via classification algorithms. When these generated variables are included as covariates in regressions, even small misclassification errors can induce large biases in OLS estimators and invalidate standard inference. We study whether the bootstrap can correct this bias and deliver valid inference. We first show that a seemingly natural fixed-label bootstrap, which generates data using estimated labels but relies on a corrupted version in estimation, is generally invalid unless a strong independence condition between the latent true labels and other covariates holds. We then propose a coupled-label bootstrap that jointly resamples the true and imputed labels, and show it is valid without this condition. Two finite-sample adjustments further improve coverage: a variance correction for uncertainty in estimated misclassification rates and a Hessian rotation for near-singular designs. We illustrate the methods in simulations and apply them to investigate the relationship between wages and remote work status.

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References · 6

  1. 2023Prediction-Powered Inferencecited by 214
  2. 2023PPI++: Efficient Prediction-Powered Inferencecited by 103
  3. 2024Large Language Models: An Applied Econometric Frameworkcited by 30
  4. 2024Inference for Regression with Variables Generated by AI or Machine Learningcited by 10
  5. 2025A Unifying Framework for Robust and Efficient Inference with Unstructured Datacited by 4
  6. 2023Simple Estimation of Semiparametric Models with Measurement Errorscited by 1

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