How Much Should We Trust Differences-In-Differences Estimates?
How Much Should We Trust Differences-In-Differences Estimates?
Most papers that employ Differences-in-Differences estimation (DD) use many years of data and focus on serially correlated outcomes but ignore that the resulting standard errors are inconsistent. To illustrate the severity of this issue, we randomly generate placebo laws in state-level data on female wages from the Current Population Survey. …