Reorganization of Firms and Labour Market Inequality

Assar Lindbeck and Dennis Snower

No 1375, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper explores the implications of the ongoing reorganization of firms for inequality in the labour market. We show how recent technological advances in physical and human capital can lead to the breakdown of occupational barriers, creating demands for new combinations of skills, and thereby leading to new patterns of wage inequality. Specifically, our analysis indicates how the changes can segment the labour market into an expanding sector of restructured firms where wages are rising, a contracting sector of traditional firms where wages are relatively stagnant, and an expanding pool of the unemployed. The analysis helps explain various significant labour market phenomena, such as: the increased versatility of work; the widening dispersion of wages within occupational, educational, and job tenure groups in the United Kingdom and the United States, accompanied by a narrowing of the male-female wage differentials; the reorganization of firms from task-oriented departments to customer-oriented teams; and the breakdown of occupational barriers.

Keywords: Human Capital; Inequality; Information Flows; Organization of Firms; Restructuring; Technological Change; Wages (search for similar items in EconPapers)
JEL-codes: J23 J24 L23 M12 O33 (search for similar items in EconPapers)
Date: 1996-03
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Citations: View citations in EconPapers (27)

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Related works:
Working Paper: Reorganization of Firms and Labor Market Inequality (1997)
Journal Article: Reorganization of Firms and Labor-Market Inequality (1996)
Working Paper: Reorganization of Firms and Labor Market Inequality (1996)
Working Paper: Reorganization of Firms and Labor Market Inequality (1995)
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