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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

  • Mittag, Nikolas

"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

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File URL: http://doku.iab.de/fdz/reporte/2012/MR_01-12_EN.pdf
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Paper provided by Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany] in its series FDZ Methodenreport with number 201201_en.

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Length: 63 pages
Date of creation: 12 Mar 2012
Date of revision:
Handle: RePEc:iab:iabfme:201201_en
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  9. Abowd, John M. & Kramarz, Francis, 1999. "Econometric analyses of linked employer-employee data," Labour Economics, Elsevier, vol. 6(1), pages 53-74, March.
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  15. John M. Abowd & Robert H. Creecy & Francis Kramarz, 2002. "Computing Person and Firm Effects Using Linked Longitudinal Employer-Employee Data," Longitudinal Employer-Household Dynamics Technical Papers 2002-06, Center for Economic Studies, U.S. Census Bureau.
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  17. Woodcock, Simon D., 2015. "Match effects," Research in Economics, Elsevier, vol. 69(1), pages 100-121.
  18. C. Kirabo Jackson, 2010. "Match Quality, Worker Productivity, and Worker Mobility: Direct Evidence From Teachers," NBER Working Papers 15990, National Bureau of Economic Research, Inc.
  19. Francis Kramarz & Stephen Machin & Amine Ouazad, 2009. "What Makes a Test Score? The Respective Contributions of Pupils, Schools and Peers in Achievement in English Primary Education," CEE Discussion Papers 0102, Centre for the Economics of Education, LSE.
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  22. Jacobebbinghaus, Peter, 2008. "LIAB-Datenhandbuch, Version 3.0," FDZ Datenreport. Documentation on Labour Market Data 200803_de, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
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