Dear All,

I am trying to estimate the effect of tariffs changes on employment within firms. Thus, I run a regression like
Code:
xtreg ln_employment ln_tariffs i.year, fe robust
where ln is the natural logarithm. The interpretation of that would be that a one percentage point increase in tariffs is associated with a b1 percent change in employment.

What I see quite often in the literature is that they estimate some regression like DELTA(ln_employment) = DELTA(ln_tariffs) + error to account for the variables being non-stationary.

Would the following code implement this correctly in Stata
Code:
xtreg d.ln_employment d.ln_tariffs i.year, fe, robust
? Further, I am unsure how to interpret it since the variables are differenced and in natural logarithms. Intuitively, I´d say that "an increase of one percentage point in the growth of tariffs is associated with a b1 percent increase in the growth of employment". Would that be correct?

Thank you very much for your help!

All the best
Leon