On Event Studies and Distributed-Lags in Two-Way Fixed Effects Models: Identification, Equivalence, and Generalization

Kurt Schmidheiny and Sebastian Siegloch

No 201, ECONtribute Discussion Papers Series from University of Bonn and University of Cologne, Germany

Abstract: We discuss properties and pitfalls of panel-data event study designs. We derive three main results. First, assuming constant treatment effects before and/or after some event time, also known as binning, is a natural restriction imposed on theoretically infinite effect windows. Binning identifies dynamic treatment effects in the absence of never-treated units and is particularly suitable in case of multiple events. Second, event study designs with binned endpoints and distributed-lag models are numerically identical leading to the same parameter estimates after correct reparametrization. Third, classic dummy variable event study designs can be generalized to models that account for multiple events of different sign and intensity of the treatment, which are common in public and labor economics. We demonstrate the practical relevance of our methodological points in an application studying the effects of unemployment benefit duration on job search effort.

Keywords: event study; distributed-lag; applied microeconomics; credibility revolution (search for similar items in EconPapers)
JEL-codes: C23 C51 H00 J08 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2022-09
New Economics Papers: this item is included in nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
https://www.econtribute.de/RePEc/ajk/ajkdps/ECONtribute_201_2022.pdf First version, 2022 (application/pdf)

Related works:
Journal Article: On event studies and distributed‐lags in two‐way fixed effects models: Identification, equivalence, and generalization (2023)
Working Paper: On event studies and distributed-lags in two-way fixed effects models: Identification, equivalence, and generalization (2020)
Working Paper: On Event Studies and Distributed-Lags in Two-Way Fixed Effects Models: Identification, Equivalence, and Generalization (2019)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ajk:ajkdps:201

Access Statistics for this paper

More papers in ECONtribute Discussion Papers Series from University of Bonn and University of Cologne, Germany Niebuhrstrasse 5, 53113 Bonn, Germany.
Bibliographic data for series maintained by ECONtribute Office ().