Stata Panel Data | [repack]

Random effects assumes the unobserved panel effects are uncorrelated with your regressors. This is a strong assumption but allows inclusion of time-invariant variables.

use "http://www.stata-press.com/data/r18/nlswork.dta", clear xtset idcode year stata panel data

This model was like a personal filter. It ignored things that stayed the same for a person (like their birthplace or genetic traits) and only looked at how in education led to Random effects assumes the unobserved panel effects are