EconPapers    
Economics at your fingertips  
 

Firming Up Inequality

Jae Song (), David J. Price, Fatih Guvenen (), Nicholas Bloom () and Till von Wachter ()

No 21199, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Earnings inequality in the United States has increased rapidly over the last three decades, but little is known about the role of firms in this trend. For example, how much of the rise in earnings inequality can be attributed to rising dispersion between firms in the average wages they pay, and how much is due to rising wage dispersion among workers within firms? Similarly, how did rising inequality affect the wage earnings of different types of workers working for the same employer—men vs. women, young vs. old, new hires vs. senior employees, and so on? To address questions like these, we begin by constructing a matched employer-employee data set for the United States using administrative records. Covering all U.S. firms between 1978 to 2012, we show that virtually all of the rise in earnings dispersion between workers is accounted for by increasing dispersion in average wages paid by the employers of these individuals. In contrast, pay differences within employers have remained virtually unchanged, a finding that is robust across industries, geographical regions, and firm size groups. Furthermore, the wage gap between the most highly paid employees within these firms (CEOs and high level executives) and the average employee has increased only by a small amount, refuting oft-made claims that such widening gaps account for a large fraction of rising inequality in the population.

JEL-codes: E24 E25 J31 L23 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec, nep-ent, nep-lma, nep-mac and nep-ure
Date: 2015-05
Note: EFG IO LS ME PE PR
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (14) Track citations by RSS feed

Downloads: (external link)
http://www.nber.org/papers/w21199.pdf (application/pdf)
Access to the full text is generally limited to series subscribers, however if the top level domain of the client browser is in a developing country or transition economy free access is provided. More information about subscriptions and free access is available at http://www.nber.org/wwphelp.html. Free access is also available to older working papers.

Related works:
Working Paper: Firming Up Inequality (2015) Downloads
Working Paper: Firming up inequality (2015) Downloads
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:nbr:nberwo:21199

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w21199
The price is Paper copy available by mail.

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Series data maintained by ().

 
Page updated 2017-12-02
Handle: RePEc:nbr:nberwo:21199