Hi,

I am using panel data about women's wellbeing and influencing factors, therefore, I have been using a fixed effects panel regression (xtreg..., fe cluster(pidp)) so far.
To establish causality I am trying to use an IV regression. I assume that I need to account for the panel nature and fe, so so far have used the following regress:
xtivreg $Y1 $X1 ($Y2 = $X2), fe
Where Y1 is the dependent variable (life satisfaction)
X2 is the endogenous variable (housewife)
X1 are controls (marital status, children, region, income, year, age)
X2 is the instrument (gender employment ratio by region and year)

I have seen that there is also a regression for IV that accounts for the endogenous variable being binary, which mine is, using treatreg $Y1 $X1, treat($Y2 = $X2 $X1), which makes the first stage probit. However, this does not account for fe, please could someone help by providing guidance on which is the best method to use?

I have some other job status' as well, (unemployed, part-time, full-time), do these need to be included in the iv regressions? Or are they accounted for as '0' in the binary variable 'housewife'?

Many thanks,

Ash