What's Trending in Difference-in-Differences? A Synthesis of the Recent Econometrics Literature

TL;DR

This paper reviews recent developments in difference-in-differences econometrics, categorizing advances that relax canonical assumptions and providing guidance for empirical researchers.

Contribution

It synthesizes recent DiD literature, clarifies methodological extensions, and offers practical recommendations for applied econometric analysis.

Findings

Recent DiD methods address multiple periods and treatment timing.

Advances include handling violations of parallel trends.

Frameworks for alternative inference methods have been developed.

Abstract

This paper synthesizes recent advances in the econometrics of difference-in-differences (DiD) and provides concrete recommendations for practitioners. We begin by articulating a simple set of ``canonical'' assumptions under which the econometrics of DiD are well-understood. We then argue that recent advances in DiD methods can be broadly classified as relaxing some components of the canonical DiD setup, with a focus on $(i)$ multiple periods and variation in treatment timing, $(ii)$ potential violations of parallel trends, or $(iii)$ alternative frameworks for inference. Our discussion highlights the different ways that the DiD literature has advanced beyond the canonical model, and helps to clarify when each of the papers will be relevant for empirical work. We conclude by discussing some promising areas for future research.