scholarly journals A Distributional Framework for Matched Employer Employee Data

Econometrica ◽  
2019 ◽  
Vol 87 (3) ◽  
pp. 699-739 ◽  
Author(s):  
Stéphane Bonhomme ◽  
Thibaut Lamadon ◽  
Elena Manresa
Keyword(s):  
Firm Heterogeneity ◽  
Unobserved Heterogeneity ◽  
Structural Models ◽  
Static Model ◽  
Small Contribution ◽  
Nonlinear Interactions ◽  
Worker Mobility ◽  
Earnings Dynamics ◽  
Earnings Dispersion ◽  
Employee Data

We propose a framework to identify and estimate earnings distributions and worker composition on matched panel data, allowing for two‐sided worker‐firm unobserved heterogeneity and complementarities in earnings. We introduce two models: a static model that allows for nonlinear interactions between workers and firms, and a dynamic model that allows, in addition, for Markovian earnings dynamics and endogenous mobility. We show that this framework nests a number of structural models of wages and worker mobility. We establish identification in short panels, and develop tractable two‐step estimators where firms are classified in a first step. Applying our method to Swedish administrative data, we find that log‐earnings are approximately additive in worker and firm heterogeneity. Our estimates imply the presence of strong sorting patterns between workers and firms, and a small contribution of firms—net of worker composition—to earnings dispersion. In addition, we document that wages have a direct effect on mobility, and that, beyond their dependence on the current firm, earnings after a job move also depend on the previous employer.

scholarly journals Seniority rules, worker mobility and wages: Evidence from multi-country linked employer-employee data

2018 ◽  
Vol 51 ◽  
pp. 48-62 ◽  
Author(s):  
Petri Böckerman ◽  
Per Skedinger ◽  
Roope Uusitalo
Keyword(s):  
Worker Mobility ◽  
Employee Data

scholarly journals Worker flows, reallocation dynamics, and firm productivity: new evidence from longitudinal matched employer–employee data

2020 ◽  
Author(s):  
Elena Grinza
Keyword(s):  
Fixed Effects ◽  
Function Method ◽  
Control Function ◽  
Firm Productivity ◽  
Employment Level ◽  
Worker Mobility ◽  
Worker Flows ◽  
The Impact ◽  
New Evidence ◽  
Employee Data

Abstract This article investigates the impact of the worker flows of a firm on productivity by using unique longitudinal matched employer–employee data. The analysis has split a firm’s total worker flows into three components: workers’ replacements (excess worker flows), hirings introduced to increase the firm’s employment level (net hirings), and separations of workers intended to decrease the firm’s workforce (net separations). This has allowed the impact of workers’ replacements, which represent the most prominent and compelling feature of worker mobility, to be isolated from the other two components. Endogeneity has been dealt with by using a modified version of Ackerberg et al.'s (2015, Econometrica, 83(6), 2411–2451) control function method, which explicitly accounts for firm-fixed effects. The main findings are that (i) excess flows have an inverted U-shape impact on productivity, (ii) net hirings foster firm productivity, and (iii) net separations damage it. The impacts are heterogeneous and vary widely on the basis of the types of replacements, the categories of workers involved, and the types of firms experiencing such flows. Overall, the findings of this article highlight the importance of reallocation dynamics to obtain better employer–employee matches, and call for a reconsideration of policies concerning the flexibility of the labor market.

scholarly journals What Have We Learned from Structural Models?

2017 ◽  
Vol 107 (5) ◽  
pp. 287-292 ◽  
Author(s):  
Richard Blundell
Keyword(s):  
Decision Making ◽  
Economic Model ◽  
Unobserved Heterogeneity ◽  
Structural Models ◽  
Model Specification ◽  
Reduced Form ◽  
Structural Function ◽  
Underlying Mechanisms ◽  
Observed Behavior

A structural economic model is one where the structure of decision making is incorporated in the model specification. Structural models aim to identify three distinct, but related, objects: (i) structural “deep” parameters; (ii) underlying mechanisms; (iii) policy counterfactuals. The ability to provide counterfactual predictions sets structural models apart from reduced-form models. The focus is on studies that allow a better understanding of the mechanisms underlying observed behavior and that provide reliable insights about policy counterfactuals. Emphasis is given to models that minimize assumptions on the structural function and on unobserved heterogeneity and approaches that align structural and “reduced form” moments.

Unemployment and its scarring effect on wages in Germany: evidence from linked employer-employee data

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Oskar Jost
Keyword(s):  
Administrative Data ◽  
Design Methodology ◽  
Firm Heterogeneity ◽  
Unemployment Duration ◽  
Content Type ◽  
Wage Penalties ◽  
Scarring Effects ◽  
Employee Data ◽  
Practical Implications

PurposeAssess and compare scarring effects of unemployment in Germany to other countries and to consider firm heterogeneity.Design/methodology/approachThe author uses linked employer-employee data to analyze the effect of unemployment and its duration on future wages in Germany. Using administrative data on workers and firms in Germany and considering registered and unregistered unemployment episodes, the results show long-lasting wage losses caused by unemployment incidences. Furthermore, the estimations indicate that unemployment duration as well as selectivity into firms paying lower wages is of particular relevance for the explanation of wage penalties of re-employed workers.FindingsUnemployment causes massive and persistent wage declines in the future, which depend on the unemployment duration. Furthermore, reduced options of unemployed workers and selectivity in firms contribute to a large part of unemployment scarring.Practical implicationsFindings are relevant for current debates on unemployment and can help design measures to avoid huge costs of unemployment.Originality/valueThis paper analyses long-term unemployment scarring by considering not only unemployment duration but also selectivity in firms and its effect on the scarring effect.

scholarly journals Sources of Wage Inequality

2013 ◽  
Vol 103 (3) ◽  
pp. 214-219 ◽  
Author(s):  
Anders Akerman ◽  
Elhanan Helpman ◽  
Oleg Itskhoki ◽  
Marc-Andreas Muendler ◽  
Stephen Redding
Keyword(s):  
Labor Market ◽  
Wage Inequality ◽  
Firm Heterogeneity ◽  
Labor Market Institutions ◽  
Market Institutions ◽  
Stylized Facts ◽  
Wage Differences ◽  
Employee Data

Recent theories of firm heterogeneity emphasize between-firm wage differences as a new mechanism through which trade can affect wage inequality. Using linked employer-employee data for Sweden, we show that many of the stylized facts about wage inequality found in Helpman et al. (2012) for Brazil also hold for Sweden. Much of overall wage inequality arises within sector-occupations and for workers with similar observable characteristics. One notable difference is a smaller contribution from between-firm differences in wages in Sweden, which could reflect the influence of Swedish labor market institutions in dampening the scope for variation in wages between firms through collective wage agreements.

Unobserved Individual and Firm Heterogeneity in Wage and Job-Duration Functions: Evidence from German Linked Employer–Employee Data

2011 ◽  
Vol 12 (4) ◽  
pp. 469-489 ◽  
Author(s):  
Thomas Cornelißen ◽  
Olaf Hübler
Keyword(s):  
Fixed Effects ◽  
Job Loss ◽  
Firm Heterogeneity ◽  
Previous Literature ◽  
High Wage ◽  
Large Firms ◽  
Job Stability ◽  
Job Duration ◽  
Employee Data

AbstractWe analyse the correlations between individual and firm fixed effects, and wage and job-duration functions. Our results for large firms suggest that low-wage firms tend to be stable firms, suggesting that lower wages can buy job stability. Furthermore, high-wage workers sort into the stable low-wage firms. Our interpretation is that high-wage workers have a higher wage to insure against job loss and can afford more easily to forgo wages in favour of job stability. This may provide an explanation of the puzzle identified in previous literature that high-wage workers are matched to low-wage firms.

Economic Value for University Services: Modelling and Heterogeneity Analysis

2017 ◽  
Vol 59 (5) ◽  
pp. 671-690
Author(s):  
Raquel Sánchez-Fernández ◽  
David Jiménez-Castillo ◽  
Angeles Iniesta-Bonillo
Keyword(s):  
Least Squares ◽  
Survey Data ◽  
Unobserved Heterogeneity ◽  
Economic Value ◽  
Perceived Value ◽  
Structural Models ◽  
Finite Mixture ◽  
Heterogeneity Analysis ◽  
University Services ◽  
Value Model

The study described here develops a perceived value model, from the alumni's perspective, to determine the sources of economic value universities must focus on to enhance satisfaction, organisational image and identification. The assessment of university audiences' perceived value of service is increasingly critical for universities to become more innovative and competitive, yet research rarely examines the nature, effects or perceptions of value in this context. The study also aims to identify alumni-specific differences in the model, considering the existence of unobserved heterogeneity. Survey data from a sample of 500 alumni were examined using partial least squares (PLS) and Finite Mixture PLS. Overall results support the model, but the heterogeneity analysis differentiates between two latent classes in the number of sources of economic value and the intensity and significance of the proposed relationships. The findings provide useful theoretical and practical insights, and highlight the importance of uncovering heterogeneity in structural models.

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