Work

It's Where You Work: Increases in Earnings Dispersion across Establishments and Individuals in the U.S.

Year: 2014

Type: report

Abstract: This paper links data on establishments and individuals to analyze the role of establishments in the increase in inequality that has become a central topic in economic analysis and policy debate.It decomposes changes in the variance of ln earnings among individuals into the part due to changes in earnings among establishments and the part due to changes in earnings within-establishments and finds that much of the 1970s-2010s increase in earnings inequality results from increased dispersion of the earnings among the establishments where individuals work.It also shows that the divergence of establishment earnings occurred within and across industries and was associated with increased variance of revenues per worker.Our results direct attention to the fundamental role of establishment-level pay setting and economic adjustments in earnings inequality.

Source: National Bureau of Economic Research

DOI: 10.3386/w20447

Authors: Erling Barth, Alex Bryson, James Davis, Richard Freeman

Institutions: National Bureau of Economic Research, Institute for Social Research, National Institute of Economic and Social Research

Language: English

Topic: Labor market dynamics and wage inequality

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDGs: Decent work and economic growth, Reduced inequalities

Open Access status: green

Funders: Harvard University, Norges Forskningsråd

OpenAlex ID: W3123280951

Cites: 56

Cited by: 108

Related to: 10