Dear Statalists!

I am currently working on a model to explain the influence of Economic Freedom on the Female Labor Force Participation Rate. For this I am using data from 100 countries over 15 years. The idea is to demonstrate this relationship using a fixed effects model, in order to analyze the effect within countries. I did it using Stata and adding another independent variable (which is Portion of Seats held by women at Parlament and has no correlation with Economic Freedom) and the result we got is that if there was a significant influence (p value<0.05) of both economic freedom and Portion of Seats held by women on Female Labor Force Participation , but then when doing the hausman test, the result leads to the model being better clarified with a random effects model. I wanted to know if a random effects model still serves the purpose of checking if EF has an effect on FLFP no matter the country, or not. And if not, what do you recommend me to do to improve the model?

The commands that I used are the following:

egen Country1=group(Country)

xtset Country1 Year, yearly

xtsum FLFP EFI Parlament

xtreg FLFP EFI Parlamen , fe

xtreg FLFP EFI Parlamen , re

Both (fixed and random effects) were significant.

After running the Hausman test the result was Prob>chi2 = 0.3332. So as I understand, this means this model is better explained by random effects.

to be honest I´m new at this and don´t know if it´s necessary to add dummy variables in order to make a fixed effects model work.

THANKS IN ADVANCE