Empir Econ https://doi.org/10.1007/s00181-018-1465-0 1 2 Kimin Kim · Myoung-jae Lee Received: 17 May 2017 / Accepted: 27 April 2018 © Springer-Verlag GmbH Germany, part of Springer Nature 2018 Abstract In the usual difference in differences (DD), there is a control group that is never treated and a treatment group that is treated at some time point. However, there are DD cases where the control group is always treated (instead of always untreated), which we call ‘DD in reverse (DDR)’. This paper examines how the usual DD identiﬁcation and estimation procedures change for DDR. As it turns out, DDR estimation can be performed in the same way as DD estimation. In contrast, the identiﬁcation procedure is quite different, because DDR essentially identiﬁes pre-treatment-period effects, whereas DD identiﬁes post-treatment-period effects. An empirical illustration of the effects of a work-hour limit law on actual work hours and wages is provided, where the law is applied to large ﬁrms ﬁrst and then small ﬁrms 1 year later in South Korea so that in the second year, the large ﬁrms constitute the always-treated control group and the small ﬁrms constitute the treatment group. We ﬁnd that the law raised South Korean workers’ well-being, as
Empirical Economics – Springer Journals
Published: Jun 5, 2018
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