Advanced Panel Data Methods for Matched Employer-Employee Data

Course overview

Understanding how workers and firms interact over time is central to modern labor economics. This course examines key questions such as the sources of wage inequality, how workers sort across firms, how school and teacher quality affect human capital formation, how gender wage gaps evolve during the career, and how migration decisions shape labor markets across countries. We use rich longitudinal datasets that follow individuals, firms, households, or schools over time—including matched employer–employee data—to study these issues.

The course provides an advanced methodological and applied overview of econometric techniques for panel data commonly used in labor economics. The course progresses from established methods to cutting-edge developments. 

We begin by revisiting foundational approaches that help account for persistent differences across workers, firms, and institutions. We then study recent developments that allow for richer patterns of heterogeneity in responses to labor market policies, firm dynamics, and life‐cycle behavior. Finally, we examine modern multi-way panel data models designed for situations with multiple high-dimensional fixed effects and complex dependence structures, such as worker–firm matches or students nested within schools. 

Throughout the course, emphasis is placed on connecting empirical methods to substantive labor market questions, interpreting results through an economic lens, and developing good empirical practice.