Events

Prof. Xincheng Qiu
Assistant Professor of Economics
Peking University

This paper studies how worker and firm heterogeneity shape wage inequality over the life cycle. We extend the AKM (Abowd, Kramarz and Margolis, 1999) framework to allow for worker and firm heterogeneity in returns to experience, and propose a clustering procedure to estimate it. Using matched employer-employee data from Italy, we find substantial heterogeneity in both worker and firm experience effects, and decompose the increase in life-cycle wage inequality into worker and firm components. Finally, we apply our framework to shed light on the evolution of the gender wage gap over the life cycle.