Servitization, Inequality, and Wages

Dominik Boddin and Thilo Kroeger

Labour Economics, 2022, vol. 77, issue C

Abstract: This paper studies the effect of servitization, i.e., within-establishment changes in the labor force composition towards higher shares of workers with service occupations, on within-establishment wage inequality. We identify servitization as being a main driver of increasing within-establishment wage inequality. Servitization accounts for roughly 7% of the observed increase in the within-establishment wage inequality in manufacturing industries between 1994 and 2017. Higher servitization of an establishment’s labor force is associated with, on average, a lower wage level for otherwise equal workers across the majority of occupations. The wage decrease is particularly pronounced for workers in low-skilled manufacturing occupations and workers at the lower end of the wage distribution. These heterogeneous wage effects explain the increase in within-establishment wage inequality.

Keywords: Employment Structure; Occupational Change; Within-Firm Adjustments; Inequality; Wages; Servitization; Germany (search for similar items in EconPapers)
JEL-codes: E24 J21 J24 J31 L23 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0927537121000464
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:labeco:v:77:y:2022:i:c:s0927537121000464

DOI: 10.1016/j.labeco.2021.102011

Access Statistics for this article

Labour Economics is currently edited by A. Ichino

More articles in Labour Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().