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Wednesday, May 10, 2006

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mango

Spurious regression is what I worried without looking at the data (time series is what I was doubting they will use, as cross sectional is not very meaningful in this case). Very good reason for it: change in government spending most likely made in law, so quite persistent, and some argument for the persistence of factors affect women's labor participation.

However, it seems they are using a panel with both large T and N (typo in eq 27?). It's well known that spurious regression problem would be gone in panel, but I guess they still need to be careful on other limiting theories with (probably) unit root panel.

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