Dear all,

I am writing here with the hope I can find help regarding an obstacle that I am having with Stata. I have a dataset that contains information for 3 years, and according to Wooldridge, to check if the effect of a variable has changed over a certain time period, then I have to interact the variable with the year dummy. So my base year is year=2014, and the other two years are 2016 and 2018. I want to check how being unemployed in 2018 and 2016 affects the dependent variable in comparison to 2014. If I run in Stata the code reg y var1 var2 unemployed i.year i.unemployed#i.year, the interaction term unemployed#2018 gets ommited. I have also tried to interact unemployed with dummy year for 2016 and then also interact it with dummy year for 2018, but then other interactions get ommited as well. I also have interactions of other categorical variables with year dummies and it has worked perfectly. Now I wonder whether I have correctly understood the concept from Wooldridge book or maybe my code is not correct. Does anyone have any idea how to proceed?

Best Regards,

Lola Brahimi

I am writing here with the hope I can find help regarding an obstacle that I am having with Stata. I have a dataset that contains information for 3 years, and according to Wooldridge, to check if the effect of a variable has changed over a certain time period, then I have to interact the variable with the year dummy. So my base year is year=2014, and the other two years are 2016 and 2018. I want to check how being unemployed in 2018 and 2016 affects the dependent variable in comparison to 2014. If I run in Stata the code reg y var1 var2 unemployed i.year i.unemployed#i.year, the interaction term unemployed#2018 gets ommited. I have also tried to interact unemployed with dummy year for 2016 and then also interact it with dummy year for 2018, but then other interactions get ommited as well. I also have interactions of other categorical variables with year dummies and it has worked perfectly. Now I wonder whether I have correctly understood the concept from Wooldridge book or maybe my code is not correct. Does anyone have any idea how to proceed?

Best Regards,

Lola Brahimi

## Comment