High Wage Workers Work for High Wage Firms / Katarína Borovičková, Robert Shimer.

Format:

Book

Author/Creator:

Borovičková, Katarína.

Contributor:

National Bureau of Economic Research.

Shimer, Robert.

Series:

Working Paper Series (National Bureau of Economic Research) no. w24074.

NBER working paper series no. w24074

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2017.

Summary:

We develop a new approach to measuring the correlation between the types of matched workers and firms. Our approach accurately measures the correlation in data sets with many workers and firms, but a small number of independent observations for each. Using administrative data from Austria, we find that the correlation between worker and firm types lies between 0.4 and 0.6. We use artificial data sets with correlated worker and firm types to show that our estimator is accurate. In contrast, the Abowd, Kramarz and Margolis (1999) fixed effects estimator suggests no correlation between types in our data set. We show both theoretically and empirically that this reflects an incidental parameter problem.

Notes:

Print version record

November 2017.