Stephen A. Woodbury
Department of Economics
Michigan State University
486 West Circle Drive, Room 110
East Lansing, MI 48824
Institutional Affiliations: Michigan State University and W.E. Upjohn Institute for Employment Research
Information about this author at RePEc
NBER Working Papers and Publications
|January 2020||Do Firm Effects Drift? Evidence from Washington Administrative Data|
with Marta Lachowska, Alexandre Mas, Raffaele D. Saggio: w26653
We study the time-series properties of firm effects in the two-way fixed effects models popularized by Abowd, Kramarz, and Margolis (1999) (AKM) using two approaches. The first—the rolling AKM approach (R-AKM)—estimates AKM models separately for successive two-year intervals. The second—the time-varying AKM approach (TV-AKM)—is an extension of the original AKM model that allows for unrestricted interactions of year and firm indicators. We apply to both approaches the leave-one-out methodology of Kline, Saggio and Sølvsten (2019) to correct for biases in the resulting variance components. Using administrative wage records from Washington State, we find, first, that firm effects for hourly wage rates and earnings are highly persistent. Specifically, the autocorrelation coefficient between fi...
|January 2018||Sources of Displaced Workers’ Long-Term Earnings Losses|
with Marta Lachowska, Alexandre Mas: w24217
We estimate the magnitudes of reduced earnings, work hours, and wage rates of workers displaced during the Great Recession using linked employer-employee panel data from Washington State. Displaced workers’ earnings losses occurred mainly because hourly wage rates dropped at the time of displacement and recovered sluggishly. Lost employer-specific premiums explain only 17 percent of these losses. Fully 70 percent of displaced workers moved to employers paying the same or higher wage premiums than the displacing employers, but these workers nevertheless suffered substantial wage rate losses. Loss of valuable specific worker-employer matches explain more than half of the wage losses.