unobserved heterogeneity

In this ongoing project, we study the effect of firm shutdowns on wage losses with a novel approach to accounting for worker heterogeneity. We follow Bonhomme, Lamadon, and Manresa (2019) to uncover workers’ latent types and firms’ classes using the universe of social security data of Italy’s Veneto region. We then measure responses to firm shutdowns across and within workers’ types using an event-study framework.