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st: complex difference-in-difference approach with e.g. economic sectors


From   Pascal Sulser <pascal.sulser@access.uzh.ch>
To   statalist@hsphsun2.harvard.edu
Subject   st: complex difference-in-difference approach with e.g. economic sectors
Date   Sat, 9 Feb 2008 13:29:49 +0100

Hi,

Does anyone know the correct specification for a difference-in- difference (DID) approach with e.g. economic sectors included. In a standard regression (no DID) I use e.g.

"reg unemployment_rate age age2 sector1 sector2" --> assuming the base group is working in the tertiary sector


Now, if I want to do a difference-in-difference approach to see weather there exists a significant difference between male workers and female worker, which of the two variants is the correct to chose, assuming there are differences between all independent variables?


1. reg unemployment_rate female age age_female age2 age2_female sector1 sector1_female sector2 sector2_female

OR

2. reg unemployment_rate female age age_female age2 age2_female sector1 sector1_female sector2 sector2_female sector3_female


I am not quite sure whether regression 1. is the right one assuming that if female==1 then this means she is a women working in the tertiary sector or whether I have to add that interaction term, too.


Thank you very much for your help, already!


Pascal

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