Dear all,

I have a problem with my stata commands. I am estimating the effect of a gender wage gap in different sectors on female sector employment. Now I analyze 14 OECD countries and 12 sectors over 8 years. I start with the following commands in stata:

egen Country_Sector=group(Country Sector)
encode year, gen(time)
xtset Country_Sector time

Now my original equation is xtreg + employment + wagegap + controls i.time, fe vce(r)

Now I received some feedback that I should do the following; Later in your results, I see you add sector-country FE (not sector and country FE – that would be two different sets of FE). I would also suggest to add sector-year FE. And cluster standard errors at the country level.

Im wondering how my stata regression should look like when I want to estimate country and sector FE separately should it look like this:

xtreg + employment + wagegap + controls i.year i.country i.sector, cluster(country) ?

Her second suggestion to include sector-year FE should it then look like this?

egen Sector_Year=group(Sector year)
xtreg + employment + wagegap + controls i.Sector year, fe vce(r) ?

I hope someone can help me out thanks in advance

Kind regards Joris