I am doing a paper where I examine the Scandinavian welfare model effect on inequality in the Scandinavian countries. I examine it using a balanced panel data, where I use a dummy variable for countries that use the Scandinavian welfare model.

I have used the Hausman test to find out that I need to use a fixed effects model (see the attached image). But my problem is, that I can not use a dummy variable in a fixed effects model. So I can not examine the Scandinavian welfare model effects by using my dummy variabel.

How do I solve this problem?

Looking forward to hearing from you.