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Methods for cluster-robust inference are routinely used in economics and manyother disciplines. However, it is only recently that theoretical foundationsfor the use of these methods in many empirically relevant situations have beendeveloped. In this paper, we use these theoretical results to provide a guideto empirical practice. We do not attempt to present a comprehensive survey ofthe (very large) literature. Instead, we bridge theory and practice byproviding a thorough guide on what to do and why, based on recently availableeconometric theory and simulation evidence. To practice what we preach, weinclude an empirical analysis of the effects of the minimum wage on laborsupply of teenagers using individual data.

Cluster-Robust Inference: A Guide to Empirical Practice