Hi,
I have a question regarding the fixed effects estimations. Indeed I am performin a regression of
Log wages= A*productivity+B*sex+C*age*....+Area DUMMY+sector DUMMY+...
I am estimating this equation with fixed effects. My question is the foolowing.
some of the workers do not change area and sector during the period of the analysis, while others do this. In this case the estimates for dummies are identified for those workers who change region and sector. ON the contrary, the productivity estimate regard all workers of course.
Is that possible that such a way of getting the estimates of the dummies impacts the estimates concerning the other variables (sucha s productivity)?
I red on Wooldridge that when a variable is time variant for some workers and while it is not for others it should be excluded from the model. Is that right?
I think the area and sector dummies should be in the model.
Can anyone help me?
Thank you
Ilaria
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