Is Industry Size a Carrier for Wage Inequality? A Panel Study Addressing Independent Variables of Inherently Different Sizes across Units

Jarle Aarstad and Olav Andreas Kvitastein
Additional contact information
Jarle Aarstad: Mohn Centre for Innovation and Regional Development, Western Norway University of Applied Sciences, P.O. Box 7030, NO-5020 Bergen, Norway
Olav Andreas Kvitastein: Mohn Centre for Innovation and Regional Development, Western Norway University of Applied Sciences, P.O. Box 7030, NO-5020 Bergen, Norway

JRFM, 2021, vol. 14, issue 9, 1-9

Abstract: We address how independent variables of inherently different sizes across units, e.g., small vs. large industries, in panel regression is an advantage interpretively. Analyzing a Norwegian industry panel, we find that wage inequality is a function of industry size, particularly size increase, in an absolute number of firms. A possible reason is that specialized skilled employees negotiate higher wages when there are many legal entities. The findings can also imply that wage inequality is more sensitive to random change, particularly an increase, in large rather than small industries. We conclude that particularly large industries are positive carriers of wage inequality and discuss potential underlying causal mechanisms such as monopolistic competition.

Keywords: Gini coefficients; wage inequality; unit size; fixed effects regression (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.mdpi.com/1911-8074/14/9/436/pdf (application/pdf)
https://www.mdpi.com/1911-8074/14/9/436/ (text/html)

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:gam:jjrfmx:v:14:y:2021:i:9:p:436-:d:632056

Access Statistics for this article

JRFM is currently edited by Ms. Chelthy Cheng

More articles in JRFM from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().