Economics Stack Exchange Archive

Fixed effects models vs. models where years serve as instruments

• posted by: dchandler on 2011-10-15
• tagged: econometrics
• score: 2

I’ve been looking for a good explanation of the difference between running a regression with year dummies as fixed effects vs. year dummies as instrumental variables.

A prominent example of this comes from Josh Angrist’s 1991 paper, “Grouped-data estimation and testing in simple labor-supply models”

http://www.sciencedirect.com/science/article/pii/030440769190101I

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