Abstract
Education researchers often encounter scenarios where an abrupt policy change occurs within or across jurisdictions or populations that affect key student outcomes. Difference-in-differences is a research design analysts can use to estimate causal effects of these “natural experiments.” This article introduces education researchers to the difference-in-differences approach. We provide an overview of the standard two-by-two design, which examines changes in outcomes over time between a treated and an unaffected group. Then, we discuss the key assumptions and threats to validity that researchers must address to have maximum confidence in their results. We also discuss commonly used alternative specifications that provide researchers with a more nuanced approach to estimating policy effects. Throughout the paper, we illustrate the difference-in-differences approach using the example of the implementation of an after-school tutoring program to increase economically disadvantaged students’ academic performance. In supplementary material, we provide Stata code to help assist researchers adapt the approach to their own scholarship.
Similar content being viewed by others
References
Abadie, A., Athey, S., Imbens, G. W., & Wooldridge, J. M. (2023). When should you adjust standard errors for clustering? The Quarterly Journal of Economics, 138(1), 1–35. https://doi.org/10.1093/qje/qjac038
Athey, S., & Imbens, G. W. (2022). Design-based analysis in difference-in-differences settings with staggered adoption. Journal of Econometrics, 226(1), 62–79.
Baker, A. C., Larcker, D. F., & Wang, C. C. Y. (2022). How much should we trust staggered difference-in-differences estimates? Journal of Financial Economics, 144(2), 370–395. https://doi.org/10.1016/j.jfineco.2022.01.004
Bertrand, M., Duflo, E., & Mullainathan, S. (2004). How much should we trust differences-in-differences estimates? The Quarterly Journal of Economics, 119(1), 249–275.
Borusyak, K., Jaravel, X., & Spiess, J. (2023). Revisiting event study designs: Robust and efficient estimation. arXiv. https://doi.org/10.48550/arXiv.2108.12419
Bray, M. (2010). Researching shadow education: Methodological challenges and directions. Asia Pacific Education Review, 11(1), 3–13. https://doi.org/10.1007/s12564-009-9056-6
Callaway, B., & Sant’Anna, P. H. (2021). Difference-in-differences with multiple time periods. Journal of Econometrics, 225(2), 200–230.
Cengiz, D., Dube, A., Lindner, A., & Zipperer, B. (2019). The effect of minimum wages on low-wage jobs. The Quarterly Journal of Economics, 134(3), 1405–1454. https://doi.org/10.1093/qje/qjz014
de Chaisemartin, C., D’Haultfoeuille, X., & Deeb, A. (2019). TWOWAYFEWEIGHTS: Stata module to estimate the weights and measure of robustness to treatment effect heterogeneity attached to two-way fixed effects regressions [Computer software]. Statistical Software Components S458611, Boston College Department of Economics.
Chetty, R., Friedman, J. N., Hilger, N., Saez, E., Schanzenbach, D. W., & Yagan, D. (2011). How does your kindergarten classroom affect your earnings? Evidence from project STAR. The Quarterly Journal of Economics, 126(4), 1593–1660.
Corral, D., & Ward, J. D. (2023). Calibrating costs: Do tuition reset policies affect diverse student enrollment at private baccalaureate colleges? The Review of Higher Education. https://doi.org/10.1353/rhe.0.a909286
Dang, H. A. (2007). The determinants and impact of private tutoring classes in Vietnam. Economics of Education Review, 26(6), 683–698.
de Chaisemartin, C., & D’Haultfœuille, X. (2020). Two-way fixed effects estimators with heterogeneous treatment effects. American Economic Review, 110(9), 2964–2996. https://doi.org/10.1257/aer.20181169
Dettmann, E., Giebler, A., & Weyh, A. (2020). Flexpaneldid: A Stata toolbox for causal analysis with varying treatment time and duration (SSRN Scholarly Paper No. 3692458). https://doi.org/10.2139/ssrn.3692458.
Furquim, F., Corral, D., & Hillman, N. (2020). A primer for interpreting and designing difference-in-differences studies in higher education research. In L. W. Perna (Ed.), Higher Education: Handbook of Theory and Research (Vol. 35, pp. 667–723). Springer. https://doi.org/10.1007/978-3-030-11743-6_5-1
Goodman-Bacon, A. (2021). Difference-in-differences with variation in treatment timing. Journal of Econometrics, 225(2), 254–277. https://doi.org/10.1016/j.jeconom.2021.03.014
Huntington-Klein, N. (2023). Controls in difference-in-differences don’t just work [Substack newsletter]. Data, On Average. https://nickchk.substack.com/p/controls-in-difference-in-differences.
Huntington-Klein, N. (2022). The effect: An introduction to research design and causality. CRC Press.
Jackson, C. K., Johnson, R. C., & Persico, C. (2016). The effects of school spending on educational and economic outcomes: Evidence from school finance reforms. Quarterly Journal of Economics, 131(1), 157–218.
Jayachandran, S. (2014). Incentives to teach badly: After-school tutoring in developing countries. Journal of Development Economics, 108, 190–205.
Jia, X., Zhang, X., Jing, J., Zhou, M., Li, H., Friesen, D., & Ma, Y. (2022). The impact of nonboarding on the development of disadvantaged boarding students in western rural China. Asia Pacific Education Review, 23(1), 131–150. https://doi.org/10.1007/s12564-022-09742-z
Jung, H. (2018). A late bird or a good bird? The effect of 9 o’clock attendance policy on student’s achievement. Asia Pacific Education Review, 19(4), 511–529.
Kim, E., Goodman, J., & West, M. R. (2021a). Kumon in: The recent, rapid rise of private tutoring centers. Brown University Annenberg EdWorkingPaper (21–367), 1–35. https://www.edworkingpapers.com/sites/default/files/ai21-367.pdf.
Kim, T., Lim, S., Yang, M., & Park, S. J. (2021b). Making sense of schooling during COVID-19: Crisis as opportunity in Korean schools. Comparative Education Review, 65(4), 617–639.
Kim, Y., Kester, K., & Han, S. (2022). Interesting, but are we convinced? The importance of methodological rigor at Asia Pacific Education Review. Asia Pacific Education Review, 23(2), 209–210.
Kim, Y., & Steiner, P. M. (2021). Gain scores revisited: A graphical models perspective. Sociological Methods & Research, 50(3), 1353–1375. https://doi.org/10.1177/0049124119826155
Lechner, M. (2010). The estimation of causal effects by difference-in-difference methods. Foundations and Trends® in Econometrics, 4(3), 165–224. https://doi.org/10.1561/0800000014
Li, L., Yang, Y., & Zhou, L. (2022). Can after-school tutoring improve the academic performance of students from low-income families? Trial evidence from economically backward areas in China. Asia Pacific Education Review. https://doi.org/10.1007/s12564-022-09803-3
Lu, F. (2014). Testing peer effects among college students: Evidence from an unusual admission policy change in China. Asia Pacific Education Review, 15, 257–270.
Miller, D. L. (2023). An introductory guide to event study models. Journal of Economic Perspectives, 37(2), 203–230. https://doi.org/10.1257/jep.37.2.203
Murnane, R. J., & Willett, J. B. (2011). Methods matter: Improving causal inference in educational and social science research. Oxford University Press.
Park, H., Byun, S. Y., & Kim, K. K. (2011). Parental involvement and students’ cognitive outcomes in Korea: Focusing on private tutoring. Sociology of Education, 84(1), 3–22.
Roth, J. (2022). Pretest with caution: Event-study estimates after testing for parallel trends. American Economic Review: Insights, 4(3), 305–322. https://doi.org/10.1257/aeri.20210236
Roth, J., Sant’Anna, P. H. C., Bilinski, A., & Poe, J. (2023). What’s trending in difference-in-differences? A synthesis of the recent econometrics literature. Journal of Econometrics, 235(2), 2218–2244. https://doi.org/10.1016/j.jeconom.2023.03.008
Rubin, D. B. (2005). Causal inference using potential outcomes: Design, modeling, decisions. Journal of the American Statistical Association, 100(469), 322–331.
Shadish, W. R., Cook, T. D., & Campbell, D. T. (2002). Experimental and quasi-experimental designs for generalized causal inference. Wadsworth.
Slavin, R. E. (2002). Evidence-based education policies: Transforming educational practice and research. Educational Researcher, 31(7), 15–21. https://doi.org/10.3102/0013189X031007015
St. Clair, T., & Cook, T. D. (2015). Difference-in-differences methods in public finance. National Tax Journal, 68(2), 319–338. https://doi.org/10.17310/ntj.2015.2.04
Sun, L., & Abraham, S. (2021). Estimating dynamic treatment effects in event studies with heterogeneous treatment effects. Journal of Econometrics, 225(2), 175–199. https://doi.org/10.1016/j.jeconom.2020.09.006
Wooldridge, J. M. (2021). Two-Way Fixed Effects, the two-way mundlak regression, and difference-in-differences estimators (SSRN Scholarly Paper No. 3906345). https://doi.org/10.2139/ssrn.3906345.
Zhang, W., & Bray, M. (2020). Comparative research on shadow education: Achievements, challenges, and the agenda ahead. European Journal of Education, 55(3), 322–341. https://doi.org/10.1111/ejed.12413
Funding
We received no funding to complete this project.
Author information
Authors and Affiliations
Contributions
As the first author, Dr. Corral conceptualized the study. Both authors contributed to the study design, collaboratively wrote the first draft of the manuscript, and approved the final manuscript.
Corresponding author
Ethics declarations
Conflicts of interest
We report no potential conflicts of interest.
Ethical approval
No ethics board approval was required given that this manuscript is based on simulated data.
Additional information
Publisher's Note
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
Supplementary Information
Below is the link to the electronic supplementary material.
Rights and permissions
Springer Nature or its licensor (e.g. a society or other partner) holds exclusive rights to this article under a publishing agreement with the author(s) or other rightsholder(s); author self-archiving of the accepted manuscript version of this article is solely governed by the terms of such publishing agreement and applicable law.
About this article
Cite this article
Corral, D., Yang, M. An introduction to the difference-in-differences design in education policy research. Asia Pacific Educ. Rev. (2024). https://doi.org/10.1007/s12564-024-09959-0
Received:
Revised:
Accepted:
Published:
DOI: https://doi.org/10.1007/s12564-024-09959-0