Rising Concentration and Wage Inequality

Cortes, Guido Matias; Tschopp, Jeanne (January 2020). Rising Concentration and Wage Inequality (Discussion Papers 20-01). Bern: Department of Economics

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Wage inequality has risen in many countries over recent decades. At the same time, production has become increasingly concentrated in “superstar” firms. In this paper, we show that these two phenomena are linked. Theoretically, we show that shocks that increase concentration, such as an increase in consumers’ price sensitivity, will also lead to an increase in wage dispersion between firms. Empirically, we use industry-level data from 14 European countries over the period 1999–2016 and show robust evidence of a positive and statistically significant correlation between concentration and the dispersion of firm-level wages.

Item Type:

Working Paper

Division/Institute:

03 Faculty of Business, Economics and Social Sciences > Department of Economics
03 Faculty of Business, Economics and Social Sciences > Department of Economics > Institute of Economics > Public Economics

UniBE Contributor:

Tschopp, Jeanne

Subjects:

300 Social sciences, sociology & anthropology > 330 Economics

Series:

Discussion Papers

Publisher:

Department of Economics

Language:

English

Submitter:

Dino Collalti

Date Deposited:

15 Apr 2020 11:25

Last Modified:

15 Apr 2020 11:25

BORIS DOI:

10.7892/boris.138636

URI:

https://boris.unibe.ch/id/eprint/138636

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