Rising Concentration and Wage Inequality

Guido Matias Cortes and Jeanne Tschopp

Working Paper series from Rimini Centre for Economic Analysis

Abstract: Wage inequality has risen in many countries over recent decades. At the same time, production has become increasingly concentrated in “superstar” firms. In this paper, we show that these two phenomena are linked. Theoretically, we show that shocks that increase concentration, such as an increase in consumers' price sensitivity, will also lead to an increase in wage dispersion between firms. 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 the dispersion of firm-level wages.

Date: 2020-01
New Economics Papers: this item is included in nep-eur
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Citations: View citations in EconPapers (6)

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http://rcea.org/RePEc/pdf/wp20-01.pdf

Related works:
Journal Article: Rising concentration and wage inequality (2024)
Working Paper: Rising Concentration and Wage Inequality (2020)
Working Paper: Rising Concentration and Wage Inequality (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:rim:rimwps:20-01

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