Abstract

Many questions regarding labour markets require to account for unobserved worker and firm heterogeneity. Those factors can indeed explain things such as wage inequality, gross job flows or changes in sectoral employment. So far the main econometric methodology to identify firm and worker heterogeneity has been the Abowd, Kramarz and Margolis (1999) approach. This methodology is however plagued by identification bias and incidental parameter bias. In this project, we want to analyse wage inequality using the AKM apporach but also incorporate new approaches to measure worker and firm heterogeneity such as proposed in Lochner and Schulz (2024) or Bonhomme et al. (2022).