Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/102351
Authors: 
Barth, Erling
Bryson, Alex
Davis, James C.
Freeman, Richard B.
Year of Publication: 
2014
Series/Report no.: 
IZA Discussion Papers 8437
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 log 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.
Subjects: 
earnings
earnings inequality
productivity
JEL: 
J3
J31
D3
Document Type: 
Working Paper

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