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asked ago in General Economics Questions by (160 points)
I am working with individual-level employment data and need to control for industry-specific shocks, but cannot use fixed effects (the variable of interest is time-invariant at the industry level), and I don't have data on sectoral sales. The only other thing I can think of is to control for industry employment growth. I know this is a big no-no if I want to identify the effect of industry employment growth (Angrist's perils of peer effects), but I'm wondering whether it would be ok just as a control.

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answered ago by (2.7k points)
edited ago by
I can only think of productivity, it's too irregular though and I don't know if it'll work fine as a fixed effect. Before dismissals product/worker (to be more clear) has to tend to decline and before hirings product/worker has to tend to increase. But I'm not really sure right now if it would fit well as a fixed temporary effect.