<p>Using the variation in treatment across countries within a region, there is a significant effect.</p>
<p>Using the variation in treatment within countries, there is not a significant effect.</p>
<p>It is likely that time-invariant country characteristics are confounders that cause bias when only using region fixed effects. When you control for these sources of bias, there is no significant effect.</p>

CC BY-SA 4.0
2024-06-07T07:40:44.497Z
2024-06-07T07:40:44.497Z
Michael Gmeiner
<p>I am writing a paper about the effect of childcare on maternal employment and I use an OLS regression with time and country/region fixed effects. The regions here are not within countries, but North/ South/ West/ East Europe, so broader than at the country-level.
When I run my regression with country-fixed effects, my results are all insignificant.
But when I run the same regression using region-fixed effects, they turn significant.</p>
<p>I am a bit confused how to describe that. Does that mean that at the country-level childcare does not affect maternal employment, but at the regional-level it does? How would that logically be possible?</p>

CC BY-SA 4.0
2024-06-06T12:01:54.973Z
Can I just check - when you say your 'results are all insignificant', do you mean the coefficients on each of your regressors?
Or do you mean the fixed effects themselves are not signficantly different from 0?
matthewoulton
CC BY-SA 4.0
2024-06-06T14:42:45.330Z
Hi thanks for your reply! :) 

I mean the coefficients of my independent variables are insignificant
anonymousx3
<econometrics><regression><fixed-effects><model><country>
Difference between country-fixed and region-fixed effects
anonymousx3
# Difference between country-fixed and region-fixed effects

(Asked by: username_0 on 2024-06-06)

I am writing a paper about the effect of childcare on maternal employment and I use an OLS regression with time and country/region fixed effects. The regions here are not within countries, but North/ South/ West/ East Europe, so broader than at the country-level.
When I run my regression with country-fixed effects, my results are all insignificant.
But when I run the same regression using region-fixed effects, they turn significant.

I am a bit confused how to describe that. Does that mean that at the country-level childcare does not affect maternal employment, but at the regional-level it does? How would that logically be possible?

**Tags:** econometrics, regression, fixed-effects, model, country
> **Comments:**
> **username_1**: Can I just check - when you say your 'results are all insignificant', do you mean the coefficients on each of your regressors? Or do you mean the fixed effects themselves are not signficantly different from 0?  
> **username_0**: Hi thanks for your reply! :)   I mean the coefficients of my independent variables are insignificant  

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## 1 answers

### Answer by username_2 on 2024-06-07. Score: 1

Using the variation in treatment across countries within a region, there is a significant effect.

Using the variation in treatment within countries, there is not a significant effect.

It is likely that time-invariant country characteristics are confounders that cause bias when only using region fixed effects. When you control for these sources of bias, there is no significant effect.


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