Dear scholars,

In my research, I am constructing two-panel models: one-First Differencing Model and secondly -Panel data model with lagged independent variables. The employment and real-wage are used as the dependent variables for the first and second model respectively.

For the first one, I have enough justification and evidence to use the First Difference model, however, for the second model, the same model is not significant. But the Panel data model with lagged independent variables is significant and easy to analyze this model.

In this scenario, how can I justify the panel data model with lagged independent variables?
Or, which test should I do for this?
Or, is it enough to use only the Panel Data Model with lagged independent variables without FE and RE models?

Noted that I have already done Unit Root/Cross Section Dependence/ Cointegration tests. It has a Unit root, CD and cointegration.

Thanks