Rising between-workplace inequalities in high-income countries

Donald Tomaskovic-Devey (1) , Anthony Rainey (1) , Dustin Avent-Holt (2) , Nina Bandelj (3) , István Boza (4) , David Cort (1) , Olivier Godechot (5) , Gergely Hajdu (6) , Martin Hällsten (7) , Lasse Folke Henriksen (8) , Are Skeie Hermansen (9) , Feng Hou , Jiwook Jung (10) , Aleksandra Kanjuo Mrčela (11) , Joe King (12) , Naomi Kodama (13) , Tali Kristal (14) , Alena Křížková (15) , Zoltán Lippényi (16) , Silvia Maja Melzer (17) , Eunmi Mun (10) , Andrew Penner (3) , Trond Petersen (18) , Andreja Poje , Mirna Safi (5) , Max Thaning (7) , Zaibu Tufail (3)

1 UMass Amherst - University of Massachusetts [Amherst]
2 Augusta University
3 UC Irvine - University of California [Irvine]
4 CEU - Central European University [Budapest, Hongrie]
5 OSC - Observatoire sociologique du changement (Sciences Po, CNRS)
6 Vienna University of Economics and Business
7 Stockholm University
8 CBS - Copenhagen Business School [Copenhagen]
9 UiO - University of Oslo
10 University of Illinois at Urbana-Champaign [Urbana]
11 University of Ljubljana
12 Operational Evaluation Division, Institute for Defense Analyses, 4850 Mark Center Drive Alexandria, VA 22311-1882, United States
13 Nihon University
14 University of Haifa [Haifa]
15 CAS - Czech Academy of Sciences [Prague]
16 University of Groningen [Groningen]
17 UPF - Universitat Pompeu Fabra [Barcelona]
18 UC Berkeley - University of California [Berkeley]

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.

Keywords: inequality; earnings; workplaces; institutions; administrative data; inequality

Domains: Sociology

Donald Tomaskovic-Devey, Anthony Rainey, Dustin Avent-Holt, Nina Bandelj, István Boza, et al.. Rising between-workplace inequalities in high-income countries. Proceedings of the National Academy of Sciences of the United States of America, 2020, 117 (17), pp.9277-9283. ⟨10.1073/pnas.1918249117⟩. ⟨hal-03098529⟩