Scientific Journal Article
Rising between-workplace inequalities in high-income countries
Proceedings of the National Academy of Sciences
2020
Earnings
Canada
Czechia
Denmark
France
Germany
Hungary
Israel
Japan
Netherlands
Norway
Slovenia
South Korea
Sweden
United States of America

Abstract

It is well documented that earnings inequalities have risen in many high-income countries. Less clear are the linkages between rising income inequality and workplace dynamics, how within- and between-workplace inequality varies across countries, and to what extent these inequalities are moderated by national labor market institutions. In order to describe changes in the initial between- and within-firm market income distribution we analyze administrative records for 2,000,000,000+ job years nested within 50,000,000+ workplace years for 14 high-income countries in North America, Scandinavia, Continental and Eastern Europe, the Middle East, and East Asia. We find that countries vary a great deal in their levels and trends in earnings inequality but that the between-workplace share of wage inequality is growing in almost all countries examined and is in no country declining. We also find that earnings inequalities and the share of between-workplace inequalities are lower and grew less strongly in countries with stronger institutional employment protections and rose faster when these labor market protections weakened. Our findings suggest that firm-level restructuring and increasing wage inequalities between workplaces are more central contributors to rising income inequality than previously recognized.

Contributors

Donald Tomaskovic-Devey
University of Massachusetts, Amherst
Anthony Rainey
University of Massachusetts, Amherst
Dustin Avent-Holt
Augusta University
Nina Bandelj
University of California, Irvine
István Boza
HUN-REN KRTK Institute of Economics
Olivier Godechot
Sciences Po
Martin Hällsten
Stockholm University
Lasse Folke Henriksen
Copenhagen Business School
Are Skeie Hermansen
University of Oslo
Feng Hou
University of Toronto
Jiwook Jung
University of Illinois at Urbana-Champaign
Aleksandra Kanjuo-Mrčela
University of Ljubljana
Joseph King
Naomi Kodama
Meiji Gakuin University
Tali Kristal
University of Haifa
Alena Křížková
Czech Academy of Sciences
Zoltán Lippényi
University of Groningen
Silvia Melzer
Eunmi Mun
University of Illinois at Urbana-Champaign
Andrew Penner
University of California, Irvine
Trond Petersen
University of California, Berkeley
Andreja Poje
University of Ljubljana
Mirna Safi
Sciences Po
Max Thaning
University of Stockholm
David Cort
University of Massachusetts, Amherst

Other Contributors

Key Findings

Rising between-workplace inequalities in high-income countries documents a widespread tendency for between workplace earnings inequalities to rise in multiple high-income countries. Increasingly inequalities are between, rather than within, workplaces.The pace of wage shifting varies between countries, accelerating when nations reduce working class labor market protections.