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Practical estimation methods for linked employer-employee data

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  • Upward, Richard
  • Schank, Thorsten
  • J. Andrews, Martyn

Abstract

Methods for the analysis of linked employer-employee data are not yet available in standard econometrics packages. In this paper, we make the fixed-effects methods developed originally by Abowd, Kramarz, Margolis and others more accessible, where possible, and show how they can be implemented in Stata. To illustrate these techniques, we give an example using German linked data. There is a caveat: when the number of plants is prohibitively large and the investigator wants to estimate the correlation between the worker and firm unobserved heterogeneities, the regressionbased techniques discussed are not feasible. In this version of the paper, we replace our earlier Two-Step estimator by a Classical Minimum Distance estimator.

Suggested Citation

  • Upward, Richard & Schank, Thorsten & J. Andrews, Martyn, 2005. "Practical estimation methods for linked employer-employee data," Discussion Papers 29 [rev.], Friedrich-Alexander University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
    • Handle: RePEc:zbw:faulre:29r
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    linked employee-employer panel data; fixed effects;

    JEL classification:

    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • C87 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Econometric Software
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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