Hello

I am reading a paper and have started to study the corresponding Stata codes. However, I don't understand exactly when, for what and why one use the command "vce(cluster panel_id)" in stata and in the statistical procedure.


Code:
sort State Year
egen panel_id = group(State)
sort panel_id Year
tsset panel_id Year

regress D.(viol_crime_rate asylum_pop a8_pop) i.Year [aw=adult_pop], vce(cluster panel_id)
test D.asylum_pop=D.a8_pop
Thank you very much for your help.