In an RE model, your independent variables can include individual characteristics that don’t vary over time (such as gender and race) because they won’t be differenced away as they are in the FE model. In addition, RE models are also likely to include time-effect controls — added dummy
variables for each time period in which cross-sectional observations were obtained. With time effects, you capture anything that may affect all cross-sectional units equally, on average, at a specific point in time.