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New methods to estimate models with large sets of fixed effects with an application to matched employer-employee data from Germany

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  • Mittag, Nikolas

Abstract

"This paper will introduce new methods to estimate the two-way fixed effects model and the match effects model in datasets where the number of fixed effects makes standard estimation techniques infeasible. The methods work for balanced and unbalanced panels and increase the speed of estimation without imposing excessive computational demands. I will apply the methods to a new and unusually detailed matched employer-employee dataset from Germany. The analysis shows that the omission of match effects leads to biased inference particularly concerning the effects of individual characteristics and underlines the importance of accurate biographic data." (Author's abstract, IAB-Doku) ((en)) Additional Information Program files

Suggested Citation

  • Mittag, Nikolas, 2012. "New methods to estimate models with large sets of fixed effects with an application to matched employer-employee data from Germany," FDZ Methodenreport 201201_en, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  • Handle: RePEc:iab:iabfme:201201_en
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    File URL: http://doku.iab.de/fdz/reporte/2012/MR_01-12_EN.pdf
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Araújo, Bruno César & Paz, Lourenço S., 2014. "The effects of exporting on wages: An evaluation using the 1999 Brazilian exchange rate devaluation," Journal of Development Economics, Elsevier, vol. 111(C), pages 1-16.
    2. Seth Gershenson, 2016. "Performance Standards and Employee Effort: Evidence From Teacher Absences," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 35(3), pages 615-638, June.
    3. De Weerdt, Joachim & Genicot, Garance & Mesnard, Alice, 2014. "Asymmetry of Information within Family Networks," IZA Discussion Papers 8395, Institute for the Study of Labor (IZA).
    4. Holt, Stephen B. & Papageorge, Nicholas W., 2016. "Who believes in me? The effect of student–teacher demographic match on teacher expectationsAuthor-Name: Gershenson, Seth," Economics of Education Review, Elsevier, vol. 52(C), pages 209-224.
    5. Gershenson, Seth & Holt, Stephen B. & Papageorge, Nicholas W., 2015. "Who Believes in Me? The Effect of Student-Teacher Demographic Match on Teacher Expectations," IZA Discussion Papers 9202, Institute for the Study of Labor (IZA).
    6. Moczall, Andreas, 2015. "The effect of hiring subsidies on regular wages," IAB Discussion Paper 201501, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    7. Diana Lúcia Gonzaga da Silva & Carlos Roberto Azzoni, 2016. "Location and wages: the contribution of firm and worker effects in Brazil," Working Papers, Department of Economics 2016_41, University of São Paulo (FEA-USP).
    8. Moczall, Andreas, 2015. "The effect of hiring subsidies on regular wages," Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113225, Verein für Socialpolitik / German Economic Association.

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