Lin-Tung Tsai
arXiv 8 Sep 2024 · Econometrics
arXiv:2409.05184 · PDF · Extracted main text
This paper studies staggered Difference-in-Differences (DiD) design when there is a second event confounding the target event. When the events are correlated, the treatment and the control group are unevenly exposed to the effects of the second event, causing an omitted event bias. To address this bias, I propose a two-stage DiD design. In the first stage, I estimate the combined effects of both treatments using a control group that is neither treated nor confounded. In the second stage, I isolate the effects of the target treatment by leveraging a parallel treatment effect assumption and a control group that is treated but not yet confounded. Finally, I apply this method to revisit the effect of minimum wage increases on teen employment using state-level hikes between 2010 and 2020. I find that the Medicaid expansion under the ACA is a significant confounder: controlling for this bias reduces the short-term estimate of the minimum wage effect by two-thirds.
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The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.
| Reference | Intensity | Mentions | Sections | Main text | |
|---|---|---|---|---|---|
| 1 | B Callaway \ P H C Sant'Anna (2021) Difference-in-differences with multiple time periods | 1.000 | 5 | 3 | 100% |
| 2 | Carolina Caetano \ Brantly Callaway (2024) Difference-in-differences when parallel trends holds conditional on covariates | 0.644 | 2 | 2 | 100% |
| 3 | Doruk Cengiz, Arindrajit Dube, Attila Lindner \ Ben Zipperer (2019) The effect of minimum wages on low-wage jobs | 0.644 | 2 | 2 | 100% |
| 4 | Clément de Chaisemartin \ Xavier D'Haultfœuille (2023) Two-way fixed effects and differences-in-differences estimators with several treatments | 0.644 | 2 | 2 | 100% |
| 5 | Clément de Chaisemartin \ Xavier D'Haultfœuille (2020) Two-Way Fixed Effects Estimators with Heterogeneous Treatment Effects | 0.511 | 2 | 1 | 100% |
| 6 | Arindrajit Dube, T William Lester \ Michael Reich (2016) Minimum wage shocks, employment flows, and labor market frictions | 0.511 | 2 | 1 | 100% |
| 7 | Alberto Abadie, Susan Athey, Guido W Imbens \ Jeffrey M Wooldridge (2023) When should you adjust standard errors for clustering? | 0.405 | 1 | 1 | 100% |
| 8 | John M Abowd, Bryce E Stephens, Lars Vilhuber, Fredrik Andersson, Ke… (2009) 5. The LEHD Infrastructure Files and the Creation of the Quarterly Workforce Indicators | 0.405 | 1 | 1 | 100% |
| 9 | Sylvia Allegretto, Arindrajit Dube, Michael Reich \ Ben Zipperer (2017) Credible research designs for minimum wage studies: A response to Neumark, Salas, and Wascher | 0.405 | 1 | 1 | 100% |
| 10 | D Card \ A B Krueger (1993) Minimum wages and employment: A case study of the fast food industry in New Jersey and Pennsylvania | 0.405 | 1 | 1 | 100% |
Showing the top 10 of 24 scored citations.