Do Standard Error Corrections Exacerbate Publication Bias?

In a canonical model of the publication process, I show that the interaction between standard error corrections and selective publication can inadvertently increase bias in published studies. This occurs because larger standard errors raise the bar for statistical significance, exacerbating publication bias. I examine this phenomenon in difference-in-differences studies, where clustering is associated with a near doubling of effect sizes. Using an empirical model, I find that clustering led to large improvements in coverage but also sizable increases in bias. Nonetheless, clustering is welfare-improving from a decision-theoretic standpoint, as more accurate belief updating outweighs the costs of increased publication bias.