Dear Statalist experts,
I'm trying to estimate the wage premium produced by firm level
collective agreement using a cross-sectional linked employer-employee
dataset.
In the data wages are at the worker level while the variable for
collective agreement is at the firm level. Since data are cross
sectional I cannot add firms fixed effects; thus I cannot control for
firms unobservables (I control of course for all observable
characteristics of firms) and my estimates are affected by the presence
of firm level unobserved heterogeneity.
The question is the following one: can I use a random effects approach -
i.e. exploit the linked employer-employee nature of the data (since I do
not have time variation) and treat firms unobserved characteristics as
random?
I think that commands xtmixed or gllamm perform this in Stata?
Thanks a lot in advance for any suggestion.
Simone
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