TY  - RPRT
        AU  - Addison, John T.
AU  - Portugal, Pedro
AU  - Varejão, José
        TI  - Labour Demand Research: Towards a Better Match between Better Theory and Better Data
        PY  - 2014/Apr/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 8125
        UR  - https://www.iza.org/index.php/publications/dp8125
        AB  - At first blush, most advances in labour demand were achieved by the late 1980s. Since then progress might appear to have stalled. We argue to the contrary that significant progress has been made in understanding labour market frictions and imperfections, and in modelling search behaviour and heterogeneous preferences. Perhaps most notable have been the improvements in data, in the form of longitudinal matched employer-employee data, and in techniques and algorithms (e.g. for solving heterogeneous parameter models). In short, the Cinderella status of the field is frankly overdrawn. Nevertheless, a chief lacuna remains the need for a better match between theory and data. This paper provides a critical albeit eclectic assessment of these developments, along the dimensions of the static and dynamic theory of labour demand, wage formation, and estimation, noting advances and limitations. As is conventional, somewhat greater emphasis is placed on the latter.
        KW  - multiple fixed effects
KW  - product and labour market imperfections
KW  - wage and employment determination
KW  - labour adjustment costs
KW  - input heterogeneity
KW  - labour demand
KW  - exogenous wages
KW  - establishment-level functions
        ER  -