{"title":"How Much Should We Trust Estimates of Firm Effects and Worker Sorting?","authors":"Stephane Bonhomme, Kerstin Holzheu, Thibaut Lamadon, Elena Manresa, Magne Mogstad, Bradley Setzler","doi":"10.1086/720009","DOIUrl":null,"url":null,"abstract":"Many studies use matched employer-employee data to estimate a statistical model of earnings determination with worker and firm fixed effects. Estimates based on this model have produced influential yet controversial conclusions. The objective of this paper is to assess the sensitivity of these conclusions to the biases that arise because of limited mobility of workers across firms. We use employer-employee data from the United States and several European countries while taking advantage of both fixed effects and random effects methods for bias correction. We find that limited mobility bias is severe and that bias correction is important.","PeriodicalId":48308,"journal":{"name":"Journal of Labor Economics","volume":"70 1","pages":"0"},"PeriodicalIF":3.9000,"publicationDate":"2023-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"5","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of Labor Economics","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.1086/720009","RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 5
Abstract
Many studies use matched employer-employee data to estimate a statistical model of earnings determination with worker and firm fixed effects. Estimates based on this model have produced influential yet controversial conclusions. The objective of this paper is to assess the sensitivity of these conclusions to the biases that arise because of limited mobility of workers across firms. We use employer-employee data from the United States and several European countries while taking advantage of both fixed effects and random effects methods for bias correction. We find that limited mobility bias is severe and that bias correction is important.
期刊介绍:
Since 1983, the Journal of Labor Economics has presented international research that examines issues affecting the economy as well as social and private behavior. The Journal publishes both theoretical and applied research results relating to the U.S. and international data. And its contributors investigate various aspects of labor economics, including supply and demand of labor services, personnel economics, distribution of income, unions and collective bargaining, applied and policy issues in labor economics, and labor markets and demographics.