Dear Statalist,
Sorry if my question is too general for this forum. I hope it is okay.
I am looking at the impact of trade on the returns to various levels of education in a developing country. Education is a categorical variable (where: 1 = no completed education, 2 = primary complete, 3 = secondary complete, 4 = university complete). The data is from household surveys.
My base regression is as follows:
Hourly wage = (trade_country_i) + (trade_worldminus_i) + (education level) + (more controls) + u
Because I am interested in the returns to specific returns to education, I do the following interaction:
Hourly wage = x1(trade_country_i)*(education level) + (trade_country_i) + (trade_worldminus_i) + (education level) + i(more controls) + u
The base category (1=no complete) is omitted by Stata.. but this masks important information. The coefficients on the other education levels are always positive, which makes sense as they are relative to the lowest level of education. But I really I would like to know how each react of them independently.
Is there a way to do this on Stata?
Thank you in advance.
Ray
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