Rising concentration and wage inequality

Guido Matias Cortes and Jeanne Tschopp

Scandinavian Journal of Economics, 2024, vol. 126, issue 2, 320-354

Abstract: Wage inequality has risen in many countries over recent decades. At the same time, production has become increasingly concentrated in a small number of firms. In this paper, we show that these two phenomena are linked. Theoretically, we show that an increase in consumer price sensitivity will lead to an increase in the sectoral concentration of revenues and employment, as well as an increase in wage dispersion between firms within industries. Empirically, we use industry‐level data from 14 European countries over the period 1999–2016 and show robust evidence of a positive and statistically significant correlation between concentration and between‐firm wage inequality. We show that this is driven by higher market shares and higher wages in high‐productivity firms within more concentrated sectors.

Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1111/sjoe.12547

Related works:
Working Paper: Rising Concentration and Wage Inequality (2020)
Working Paper: Rising Concentration and Wage Inequality (2020)
Working Paper: Rising Concentration and Wage Inequality (2020)
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:bla:scandj:v:126:y:2024:i:2:p:320-354

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0347-0520

Access Statistics for this article

Scandinavian Journal of Economics is currently edited by Richard Friberg, Matti Liski and Kjetil Storesletten

More articles in Scandinavian Journal of Economics from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().