Figure 5-2-4.r

# R code for Figure 5-2-4            #
# Required packages                  #
# foreign: read Stata .dta files     #
# lfe: run fixed effect regressions  #
# ggplot2: plot results              #
library(foreign)
library(lfe)
library(ggplot2)

# Download the data and unzip it
download.file('http://economics.mit.edu/~dautor/outsourcingatwill_table7.zip', 
              'outsourcingatwill_table7.zip')
unzip('outsourcingatwill_table7.zip')

# Load the data
autor <- read.dta('table7/autor-jole-2003.dta')

# Log total employment: from BLS employment & earnings
autor$lnemp <- log(autor$annemp)

# Non-business-service sector employment from CBP
autor$nonemp  <- autor$stateemp - autor$svcemp
autor$lnnon   <- log(autor$nonemp)
autor$svcfrac <- autor$svcemp / autor$nonemp

# Total business services employment from CBP
autor$bizemp <- autor$svcemp + autor$peremp
autor$lnbiz  <- log(autor$bizemp)

# Restrict sample
autor <- autor[which(autor$year >= 79 & autor$year <= 95), ]
autor <- autor[which(autor$state != 98), ]

# State dummies, year dummies, and state*time trends
autor$t  <- autor$year - 78
autor$t2 <- autor$t^2

# Generate more aggregate demographics
autor$clp     <- autor$clg    + autor$gtc
autor$a1624   <- autor$m1619  + autor$m2024 + autor$f1619 + autor$f2024
autor$a2554   <- autor$m2554  + autor$f2554
autor$a55up   <- autor$m5564  + autor$m65up + autor$f5564 + autor$f65up
autor$fem     <- autor$f1619  + autor$f2024 + autor$f2554 + autor$f5564 + autor$f65up
autor$white   <- autor$rs_wm  + autor$rs_wf
autor$black   <- autor$rs_bm  + autor$rs_bf
autor$other   <- autor$rs_om  + autor$rs_of
autor$married <- autor$marfem + autor$marmale

# Modify union variable (1. Don't interpolate 1979, 1981; 2. Rescale into percentage)
autor$unmem[79 == autor$year | autor$year == 81] <- NA
autor$unmem                                      <- autor$unmem * 100

# Create state and year factors
autor$state <- factor(autor$state)
autor$year  <- factor(autor$year)

# Diff-in-diff regression
did <- felm(lnths ~ lnemp   + admico_2 + admico_1 + admico0  + admico1  + admico2 + 
                    admico3 + mico4    + admppa_2 + admppa_1 + admppa0  + admppa1 +
                    admppa2 + admppa3  + mppa4    + admgfa_2 + admgfa_1 + admgfa0 +
                    admgfa1 + admgfa2  + admgfa3  + mgfa4
                    | state + year + state:t | 0 | state, data = autor)

# Plot results
lags_leads  <- c("admico_2", "admico_1", "admico0",
                 "admico1" , "admico2" , "admico3",
                 "mico4")
labels      <- c("2 yr prior", "1 yr prior", "Yr of adopt",
                 "1 yr after", "2 yr after", "3 yr after",
                 "4+ yr after")
results.did <- data.frame(label = factor(labels, levels = labels),
                          coef  = summary(did)$coef[lags_leads, "Estimate"] * 100,
                          se    = summary(did)$coef[lags_leads, "Cluster s.e."] * 100)
g           <- ggplot(results.did, aes(label, coef, group = 1))
p           <- g + geom_point()                                +
                   geom_line(linetype = "dotted")              + 
                   geom_errorbar(aes(ymax = coef + 1.96 * se,
                                     ymin = coef - 1.96 * se)) +
                   geom_hline(yintercept = 0)                  +
                   ylab("Log points")                          +
                   xlab(paste("Time passage relative to year of",
                              "adoption of implied contract exception"))

ggsave(p, file = "Figure 5-2-4-R.png", height = 6, width = 8, dpi = 300)

# End of script