A Distributional Framework for Matched Employer Employee Data
نویسندگان
چکیده
We propose a framework to estimate earnings distributions and worker and firm unobserved heterogeneity on matched panel data. We introduce two models: a static model that allows for interaction effects between workers and firms, and a dynamic model that allows in addition for Markovian dynamics in earnings and mobility decisions. We establish identification in short panels. We develop a tractable two-step estimation approach where firms are classified into heterogeneous classes in a first step. Finally, we apply our method to Swedish matched employer employee panel data and report estimated earnings functions, sorting patterns, and variance decompositions. JEL codes: J31, J62, C23.
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