Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/278096 
Year of Publication: 
2023
Citation: 
[Journal:] Journal for Labour Market Research [ISSN:] 2510-5027 [Volume:] 57 [Issue:] 1 [Article No.:] 1 [Year:] 2023 [Pages:] 1-29
Publisher: 
Springer, Heidelberg
Abstract: 
Although wage inequality is an important and widely studied issue, the literature is vastly silent on the relationship between firm entry and exit and the wage dispersion between firms. Using a 50% random administrative sample of West German establishments over the period 1976-2017, I study wage dispersion dynamics between and within the groups of entering, exiting, and incumbent establishments by examining the distribution of average wages across establishments. The results show that entering establishments became increasingly unequal over time, thereby contributing to the rise in wage dispersion between establishments. However, exit rates of young and low-wage establishments have dampened this effect. These findings suggest considering the consequences for wage inequality when designing and assessing policy instruments for firm entry and exit.
Subjects: 
Firm entry
Firm exit
Wage dispersion
Firm dynamics
Germany
JEL: 
L26
M13
J31
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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