Recent changes in British wage inequality: Evidence from firms and occupations
Daniel SchÃ¤fer () and
Carl Singleton ()
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Daniel SchÃ¤fer: https://sites.google.com/site/danielschaefereconomics/
ESE Discussion Papers from Edinburgh School of Economics, University of Edinburgh
Using a dataset covering a large sample of employees and their mostly very large employers, we study the dynamics of British wage inequality over the past two decades. Contrary to other studies, we find little evidence that recent increases in inequality have been driven by differences in the average wages paid by firms. Instead greater dispersion within firms can account for the majority of changes to the wage distribution. After controlling for the changing occupational content of employee wages, the role of average firm residual differences is approximately zero; the modestly increasing trend in between-firm wage inequality is explained by a combination of changes in between-occupation inequality and the occupational specialisation of firms. It is possible that previous studies, which assign some of the importance of changes in the between-firm component to industry, have misrepresented a significant role for occupations. These results are robust across measures of hourly, weekly and annual wages.
Keywords: wage inequality; within-firm inequality; occupational wage premium (search for similar items in EconPapers)
JEL-codes: E24 J31 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec, nep-lma and nep-mac
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Working Paper: Recent changes in British wage inequality: Evidence from firms and occupations (2017)
Working Paper: Recent Changes in British Wage Inequality: Evidence from Firms and Occupations (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:edn:esedps:277
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