Workforce composition, productivity and pay: the role of firms in wage inequality / Chiara Criscuolo (OECD), Alexander Hijzen (OECD and IZA), Cyrille Schwellnus (OECD), Erling Barth (Institute for Social Research Oslo and IZA), Wen-Hao Chen (Statcan), Richard Fabling (MOTU), Priscilla Fialho (OECD), Katarzyna Grabska (Maastricht University), Ryo Kambayashi (Hitotsubashi University), Timo Leidecker (OECD), Oskar Nordström Skans (Uppsala University and IZA), Capucine Riom (LSE), Duncan Roth (IAB), Balazs Stadler (OECD), Richard Upward (University of Nottingham), Wouter Zwysen (OECD) ; IZA Institute of Labor Economics
VerfasserCriscuolo, Chiara ; Hijzen, Alexander ; Schwellnus, Cyrille ; Barth, Erling ; Chen, Wen-Hao ; Fabling, Richard ; Fialho, Priscilla ; Grabska, Katarzyna
KörperschaftForschungsinstitut zur Zukunft der Arbeit
ErschienenBonn, Germany : IZA Institute of Labor Economics, May 2020
Elektronische Ressource
Umfang1 Online-Ressource (40 Seiten) : Diagramme
SerieDiscussion paper ; no. 13212
 Das Dokument ist öffentlich zugänglich im Rahmen des deutschen Urheberrechts.
Workforce composition, productivity and pay: the role of firms in wage inequality [1.39 mb]
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In many OECD countries, low productivity growth has coincided with rising inequality. Widening wage and productivity gaps between firms may have contributed to both developments. This paper uses a new harmonised cross-country linked employer-employee dataset for 14 OECD countries to analyse the role of firms in wage inequality. The main finding is that, on average across countries, changes in the dispersion of average wages between firms explain about half of the changes in overall wage inequality. Two thirds of these changes in between-firm wage inequality are accounted for by changes in productivity-related premia that firms pay their workers above common market wages. The remaining third can be attributed to changes in workforce composition, including the sorting of high-skilled workers into high-paying firms. Over all, these results suggest that firms play an important role in explaining wage inequality as wages are driven to a significant extent by firm performance rather than being exclusively determined by workers earnings characteristics.

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