Generalized AKM: Theory and Evidence
Joint work with Francesco Del Prato and Yaroslav Korobka. Slides available on request.
Abstract. We revisit the wage decomposition literature by allowing for a non-parametric function of both worker- and firm-level covariates in a wage equation with two-way (worker and firm) fixed effects. We develop theoretical results about the estimation of key covariance components and an application on Portuguese data.