2016/02/11 by Erling Barth, Alex Bryson, James C. Davis +1 · 2 citations
Business, Management and Accounting · Economics, Econometrics and Finance · #Corporate Finance and Governance #Firm Innovation and Growth #Labor market dynamics and wage inequality
paper · doi:10.1086/684045
openalex publication_date 2016/02/11 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/28
This paper analyzes the role of establishments in the upward trend in dispersion of earnings 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. The main finding is that much of the 1970s–2010s increase in earnings inequality results from increased dispersion of the earnings among the establishments where individuals work. Our results direct attention to the role of establishment-level pay setting and economic adjustments in earnings inequality.