Methods for Linked Employer-Employee Data

This chapter is intended as a guide for working with linked employer-employee data. It is targeted toward researchers who have recently obtained such data and need a reference to help orient them to key methodological and measurement issues. Because of their widespread use and popularity, I focus on models of wage determination in the spirit of Abowd, Kramarz, and Margolis (AKM) (Econometrica 67(2):251–333, 1999). Working with the AKM model and its variants requires a detailed knowledge of relevant innovations in estimation, identification, and inference. This chapter summarizes those innovations and considers open areas for applied and methodological research.