Rising between-workplace inequalities in high-income countries

Donald Tomaskovic-Devey, Anthony Rainey, Dustin Avent-Holt, Nina Bandelj, István Boza, David Cort, Olivier Godechot, Gergely Hajdu, Martin Hällsten, Lasse Folke Henriksen, Are Skeie Hermansen, Feng Hou, Jiwook Jung, Aleksandra Kanjuo-Mrčela, Joe King, Naomi Kodama, Tali Kristal, Alena Křížková, Zoltán Lippényi, Silvia Maja MelzerEunmi Mun, Andrew Penner, Trond Petersen, Andreja Poje, Mirna Safi, Max Thaning, Zaibu Tufail

Research output: Contribution to journalArticlepeer-review

Abstract

It is well documented that earnings inequalities have risen in many high-income countries. Less clear are the linkages between rising income inequality and workplace dynamics, how within- and between-workplace inequality varies across countries, and to what extent these inequalities are moderated by national labor market institutions. In order to describe changes in the initial between- and within-firm market income distribution we analyze administrative records for 2,000,000,000+ job years nested within 50,000,000+ workplace years for 14 high-income countries in North America, Scandinavia, Continental and Eastern Europe, the Middle East, and East Asia. We find that countries vary a great deal in their levels and trends in earnings inequality but that the between-workplace share of wage inequality is growing in almost all countries examined and is in no country declining. We also find that earnings inequalities and the share of between-workplace inequalities are lower and grew less strongly in countries with stronger institutional employment protections and rose faster when these labor market protections weakened. Our findings suggest that firm-level restructuring and increasing wage inequalities between workplaces are more central contributors to rising income inequality than previously recognized.

Original languageEnglish
Pages (from-to)9277-9283
Number of pages7
JournalProceedings of the National Academy of Sciences of the United States of America
Volume117
Issue number17
DOIs
StatePublished - 28 Apr 2020

Bibliographical note

Funding Information:
ACKNOWLEDGMENTS. The research and writing of this paper has been supported by many institutions. Monetary support from the US National Science Foundation (grant SES-1528294), the Alexander von Humboldt Foundation (grant AR8227), the European Research Council Advanced Grant (grant 340045), the Independent Research Fund Denmark (grant 5052-00143b), Swedish Forte (grant 2015-00807), the European Social Fund and state budget of the Czech Republic (grant CZ.03.1.51/0.0/0.0/15_009/ 0003702) institutional support: Rozvoj Výzkumné Organizace (RVO: 68378025), Research Council of Norway (Grant 287016), and the French Research Agency (Grant ANR-17-CE41-0009-01). This paper is released to inform interested parties of research and to encourage discussion. The views expressed are those of the authors and not necessarily those of the US Census Bureau. Tabular materials presented in this paper were approved for release by the US Census Bureau’s Disclosure Review Board (CBDRB-FY18-258). Yannick Savina of Sciences Po produced the figures used in the paper.

Publisher Copyright:
© 2020 National Academy of Sciences. All rights reserved.

Keywords

  • Administrative data
  • Earnings
  • Inequality
  • Institutions
  • Workplaces

ASJC Scopus subject areas

  • General

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