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A Distributional Framework for Matched Employer Employee Data

Author

Listed:
  • Thibaut Lamadon

    (University of Chicago)

  • Elena Manresa

    (MIT Sloan)

  • Stephane Bonhomme

    (University of Chicago)

Abstract

We develop an identification and estimation strategy to quantify the contributions of firm and worker heterogeneity to wages. We allow for unrestricted interaction effects between firm and worker unobservables, and for the possibility of sorting. Pooling cross-sectional observations with information coming from the joint distribution of wages of job movers, we establish nonparametric identification in short panels. Applications of the method include testing restrictions imposed by theoretical matching models, and quantifying the contributions of firms and workers to changes in wage inequality. We illustrate our approach using Swedish matched employer-employee panel data.

Suggested Citation

  • Thibaut Lamadon & Elena Manresa & Stephane Bonhomme, 2015. "A Distributional Framework for Matched Employer Employee Data," 2015 Meeting Papers 1399, Society for Economic Dynamics.
    • Handle: RePEc:red:sed015:1399
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    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

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