Question

A 2021 paper by Callaway and Sant’Anna proposed a variant of this technique to avoid a problematic “two-way fixed effect” specification for “staggered” designs. The “Ashenfelter dip” raises problems for this technique if it is unknown whether a shock is permanent or transitory. A 2004 paper by Marianne Bertrand et al. that asks “How Much Should We Trust [this technique]” simulates inconsistent standard errors using “placebo laws.” A key assumption underlying this technique is the presence of parallel trends in the pre-period. Card and Krueger used this technique to study the effect of an increase in minimum wages (-5[1])on employment in Pennsylvania. For 10 points, name this causal inference technique that compares the change in an outcome variable over time between treatment and control groups. ■END■ (10[1]0[4])

ANSWER: difference-in-differences [accept diff-diff or DID or DD; prompt on causal inference until read; prompt on regression; prompt on natural experiment or longitudinal study by asking “analyzed using what econometric technique?”]
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