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Wage Inequality and Firm Growth

Holger M. Mueller, Paige P. Ouimet and Elena Simintzi

American Economic Review, 2017, vol. 107, issue 5, 379-83

Abstract: We discuss firm-level evidence based on UK data showing that within-firm pay inequality--wage differentials between top- and bottom-level jobs--increases with firm size. Moreover, within-firm pay inequality rises as firms grow larger over time. Lastly, using wage data from 15 developed countries, we document a positive association between aggregate wage inequality at the country level and growth by the largest firms in the country. We conclude that part of what may be perceived as a global trend toward more wage inequality may be driven by an increase in the size of the largest firms in the economy.

JEL-codes: D22 J31 J71 L25 M52 (search for similar items in EconPapers)
Date: 2017
Note: DOI: 10.1257/aer.p20171014
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Handle: RePEc:aea:aecrev:v:107:y:2017:i:5:p:379-83