Lesser-Known Biases in Standard OLS Specifications for Difference-in-Differences with Covariates

Since 2017, a wealth of material has emerged on two-way fixed effects (TWFE) and difference-in-differences. Many believe TWFE bias only pertains to differential timing, but this is technically incorrect. The core issue with various TWFE biases is at its heart connected to standard specifications that have hidden assumptions like constant treatment effec…