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  • The problem with creating dummy variables

    Hi Statalists,
    I am trying to find the relationship between the change in labour productivity (dependent variable) and immigrants occupational level (independent variable). My unit analysis is by sector. From 2010-2016. Right now I am going to include dummy variable (manager, senior office and etc = is equal to 1 for high skilled occupations and vice versa) and interaction term sector*highskill into the regression. However the dummy is omitted because of collinearity as shown at the end of the post***. So my question is.....

    If my focus is on the interaction term (i.e. how immigrants with different occupational level (high or low skilled occupations) affects labour productivity in each sector), how can I do that?
    I've attached a picture of my final dataset which I use for my regression

    Thanks in advance
    Lisa
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  • #2
    Please read the FAQ for advice on how to ask questions in ways that make it easy for us to help you.
    Screen shots of data are useless. You should provide an example using the dataex command, which you can install from SSC if you are using a version of Stata earlier than version 14.

    Your variable is being excluded from the model due to collinearity but without more information about what is in the model or what your data look like it's hard to offer you any insight beyond what Stata is already telling you.

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