Rising between-workplace inequalities in high-income countries

By: Tomaskovic-Devey D., Rainey A., Avent-Holt D., Bandelj N., Boza I., Cort D., Godechot O., Hajdu G., Hällsten M., Henriksen L.F., Hermansen A.S., Hou F., Jung J., Kanjuo-Mrčela A., King J., Kodama N., Kristal T., Křížková A., Lippényi Z., Melzer S.M., Mun E., Penner A., Petersen T., Poje A., Safi M., Thaning M., Tufail Z.
Published in: Proceedings of the National Academy of Sciences of the United States of America
SDGs : SDG 10  |  Units: Social Sciences  | Time: 2020 |  Link
Description: It is well documented that earnings inequalities have risen in many high-income countries. Less clear are the linkages b etween 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. © 2020 National Academy of Sciences. All rights reserved.