Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/290050 
Year of Publication: 
2022
Series/Report no.: 
IDB Working Paper Series No. IDB-WP-1340
Publisher: 
Inter-American Development Bank (IDB), Washington, DC
Abstract: 
We use matched employer-employee data together with data on the ownership networks of Chilean firms to document a novel relationship between inequality in labor income and ownership structures. Exploiting transitions of firms in and out of networks, we show that network affiliation is associated with higher inequality along two dimensions. First, network firms pay higher average wages than standalone firms, increasing between-firm inequality. Second, the dispersion of wages within a network firm is higher than within a stand-alone firm, increasing withinfirm inequality. The effects are driven by increases in the wages of top workers, and by the entry of new top workers. Our findings shed light on the relationship between ownership structures and the distribution of labor income in the economy.
Subjects: 
Earnings premium
Earnings inequality
Business groups
Ownership
JEL: 
G32
J31
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Working Paper

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