Wage Inequality and Firm Growth
American Economic Review
vol. 107,
no. 5, May 2017
(pp. 379-83)
Abstract
We discuss firm-level evidence based on UK data showing that within-firm pay inequality--wage differentials between top- and bottom-level jobs--increases with firm size. Moreover, within-firm pay inequality rises as firms grow larger over time. Lastly, using wage data from 15 developed countries, we document a positive association between aggregate wage inequality at the country level and growth by the largest firms in the country. We conclude that part of what may be perceived as a global trend toward more wage inequality may be driven by an increase in the size of the largest firms in the economy.Citation
Mueller, Holger M., Paige P. Ouimet, and Elena Simintzi. 2017. "Wage Inequality and Firm Growth." American Economic Review, 107 (5): 379-83. DOI: 10.1257/aer.p20171014Additional Materials
JEL Classification
- D22 Firm Behavior: Empirical Analysis
- J31 Wage Level and Structure; Wage Differentials
- J71 Labor Discrimination
- L25 Firm Performance: Size, Diversification, and Scope
- M52 Personnel Economics: Compensation and Compensation Methods and Their Effects