Estimate two way fixed effect labor models
Project description
PyTwoWay
PyTwoWay is the Python package associated with the following paper:
“How Much Should we Trust Estimates of Firm Effects and Worker Sorting?” by Stéphane Bonhomme, Kerstin Holzheu, Thibaut Lamadon, Elena Manresa, Magne Mogstad, and Bradley Setzler. No. w27368. National Bureau of Economic Research, 2020.
The package provides implementations for a series of estimators for models with two sided heterogeneity:
two way fixed effect estimator as proposed by Abowd, Kramarz, and Margolis
homoskedastic bias correction as in Andrews, et al.
heteroskedastic bias correction as in Kline, Saggio, and Sølvsten
group fixed estimator as in Bonhomme, Lamadon, and Manresa
group correlated random effect as presented in the main paper
fixed-point revealed preference estimator as in Sorkin
non-parametric sorting estimator as in Borovičková and Shimer
If you want to give it a try, you can start an example notebook for the FE estimator here: for the CRE estimator here: for the BLM estimator here: for the Sorkin estimator here: and for the Borovickova-Shimer estimator here: . These start fully interactive notebooks with simple examples that simulate data and run the estimators.
The code is relatively efficient. Solving large sparse linear models relies on PyAMG. This is the code we use to estimate the different decompositions on US data. Data cleaning is handled by BipartitePandas.
The package provides a Python interface. Installation is handled by pip or Conda (TBD). The source of the package is available on GitHub at PyTwoWay. The online documentation is hosted here.
Quick Start
To install via pip, from the command line run:
pip install pytwoway
Citation
Please use following citation to cite PyTwoWay in academic publications:
Bibtex entry:
@techreport{bhlmms2020, title={How Much Should We Trust Estimates of Firm Effects and Worker Sorting?}, author={Bonhomme, St{\'e}phane and Holzheu, Kerstin and Lamadon, Thibaut and Manresa, Elena and Mogstad, Magne and Setzler, Bradley}, year={2020}, institution={National Bureau of Economic Research} }
Development
If you want to contribute to the package, the easiest way is to use poetry to set up a local environment:
poetry install poetry run python -m pytest
To push the package to PiP, increase the version number in the pyproject.toml file and then:
poetry build poetry publish
Finally to build the package for conda and upload it:
conda skeleton pypi pytwoway conda config --set anaconda_upload yes conda-build pytwoway -c tlamadon --output-folder pytwoway
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