Difference-in-Differences with Multiple Time Periods

Brantly Callaway, Pedro H. C. Sant'Anna

Published December 2021 · Journal of Econometrics · Journal article

Read the original paper Open-access full text Cite

Summary

The paper develops a framework for difference-in-differences designs in which units adopt treatment at different times across multiple periods. It defines group-time average treatment effects and shows how to identify and estimate them under conditional parallel trends, then aggregate them into interpretable summary parameters. The authors provide valid simultaneous inference and apply the methods to estimating the effect of minimum wage increases on teen employment.

Key findings

Introduces group-time average treatment effect parameters as building blocks for staggered adoption settings.
Provides identification under conditional parallel trends plus estimation, aggregation schemes, and simultaneous (uniform) inference.
Standard two-way fixed effects regressions can be misleading with heterogeneous and dynamic effects, motivating the disaggregated approach.

Subjects & keywords

Economics difference-in-differences staggered-treatment causal-inference parallel-trends econometrics

Cite this paper

APA

Brantly Callaway, & Pedro H. C. Sant'Anna (2021). Difference-in-Differences with Multiple Time Periods. Journal of Econometrics. https://doi.org/10.1016/j.jeconom.2020.12.001

BibTeX

@article{callaway2021differenceindifferences,
  author    = {Brantly Callaway and Pedro H. C. Sant'Anna},
  title     = {Difference-in-Differences with Multiple Time Periods},
  journal   = {Journal of Econometrics},
  year      = {2021},
  doi       = {10.1016/j.jeconom.2020.12.001},
  url       = {https://doi.org/10.1016/j.jeconom.2020.12.001}
}

Related in Economics

Economics2022

Social Capital I: Measurement and Associations with Economic Mobility

Raj Chetty, Matthew O. Jackson, Theresa Kuchler and Johannes Stroebel

Using data on 21 billion Facebook friendships, the authors construct ZIP-code-level measures of three distinct forms of social capital: cross-class connectedness, social cohesion, and civic engagement. They show these measures vary widely across areas and are only weakly correlated with one another. They find that economic connectedness between low- and high-income people is strongly associated with upward income mobility, more so than other forms of social capital.

Nature Open access

Economics2022

Imperfect Competition, Compensating Differentials, and Rent Sharing in the US Labor Market

Thibaut Lamadon, Magne Mogstad and Bradley Setzler

The authors build and estimate an equilibrium model of imperfect competition in the US labor market using linked employer-employee administrative data, combining firm-level productivity shocks with worker mobility. They quantify the degree of employer wage-setting power (monopsony), how firms share rents with workers, and the role of compensating differentials for non-wage amenities. They find that firms have substantial market power and pass through only part of productivity gains to wages, while amenities matter for worker sorting.

American Economic ReviewJournal article

Economics2021

The Macroeconomics of Epidemics

Martin S. Eichenbaum, Sergio Rebelo and Mathias Trabandt

The authors extend the canonical SIR epidemiological model by embedding it in a macroeconomic framework where people's consumption and labor decisions affect the spread of infection. They show that the epidemic causes a sharp recession because infected and susceptible agents cut activity to reduce contagion. A key tension emerges: the competitive equilibrium worsens the epidemic because individuals do not internalize the infection externality, and well-designed containment policy can mitigate the death toll though it deepens the short-run economic contraction.

The Review of Financial Studies Open access