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A Distributional Framework for Matched Employer Employee Data


  • Thibaut Lamadon

    (University of Chicago)

  • Elena Manresa

    (MIT Sloan)

  • Stephane Bonhomme

    (University of Chicago)


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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    Cited by:

    1. Paul Sullivan, "undated". "Job Tasks, Time Allocation, and Wages," Working Papers 2017-03, American University, Department of Economics.
    2. Peter Hull, 2018. "Estimating Treatment Effects in Mover Designs," Papers 1804.06721,
    3. Katarína Borovičková & Robert Shimer, 2017. "High Wage Workers Work for High Wage Firms," NBER Working Papers 24074, National Bureau of Economic Research, Inc.
    4. Elise Coudin & Sophie Maillard & Maxime Tô, 2018. "Family, Firms and the Gender Wage Gap in France," Working Papers 2018-09, Center for Research in Economics and Statistics.
    5. David Card & Ana Rute Cardoso & Joerg Heining & Patrick Kline, 2018. "Firms and Labor Market Inequality: Evidence and Some Theory," Journal of Labor Economics, University of Chicago Press, vol. 36(S1), pages 13-70.
    6. Manuel Arellano & Stéphane Bonhomme, 2017. "Nonlinear Panel Data Methods for Dynamic Heterogeneous Agent Models," Annual Review of Economics, Annual Reviews, vol. 9(1), pages 471-496, September.
    7. Bonhomme, Stéphane & Lamadon, Thibaut & Manresa, Elena, 2017. "Discretizing Unobserved Heterogeneity," Working Paper Series 2017:21, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    8. Christian Moser & Niklas Engbom, 2016. "Earnings Inequality and the Minimum Wage: Evidence from Brazil," 2016 Meeting Papers 72, Society for Economic Dynamics.
    9. Thibaut Lamadon & Elena Manresa & Stephane Bonhomme, 2016. "Discretizing Unobserved Heterogeneity," 2016 Meeting Papers 1536, Society for Economic Dynamics.
    10. Nimczik, Jan Sebastian, 2017. "Job Mobility Networks and Endogenous Labor Markets," Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168147, Verein für Socialpolitik / German Economic Association.
    11. Suphanit Piyapromdee & Jean Marc Robin & Rasmus Lentz, 2016. "The Anatomy of the Wage Distribution: How do Gender and Immigration Matter?," 2016 Meeting Papers 1686, Society for Economic Dynamics.
    12. Bilal, Adrien & Rossi-Hansberg, Esteban, 2018. "Location as an Asset," Working Papers 12, Federal Reserve Bank of Minneapolis, Opportunity and Inclusive Growth Institute.
    13. Patrick Kline & Raffaele Saggio & Mikkel S{o}lvsten, 2018. "Leave-out estimation of variance components," Papers 1806.01494,
    14. Bastian Schulz & Benjamin Lochner, 2016. "Labor Market Sorting in Germany," 2016 Meeting Papers 1298, Society for Economic Dynamics.
    15. Kyle Herkenhoff & Gordon Phillips & Ethan Cohen-Cole, 2016. "How Credit Constraints Impact Job Finding Rates, Sorting & Aggregate Output," Working Papers 16-25, Center for Economic Studies, U.S. Census Bureau.
    16. Espen R Moen & Rasmus Lentz, 2017. "Competitive or Random Search?," 2017 Meeting Papers 1128, Society for Economic Dynamics.
    17. Fackler, Daniel & Müller, Steffen & Stegmaier, Jens, 2017. "Explaining wage losses after job displacement: Employer size and lost firm rents," IWH Discussion Papers 32/2017, Halle Institute for Economic Research (IWH).
    18. Jacob Schwartz, 2018. "Schooling Choice, Labour Market Matching, and Wages," Papers 1803.09020,, revised Jul 2018.
    19. soyoung Lee, 2018. "The Role of Firm Heterogeneity in the Earnings Inequality," 2018 Meeting Papers 1155, Society for Economic Dynamics.
    20. Lorenzo Burlon & Davide Fantino & Andrea Nobili & Gabriele Sene, 2016. "The quantity of corporate credit rationing with matched bank-firm data," Temi di discussione (Economic working papers) 1058, Bank of Italy, Economic Research and International Relations Area.

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