Rising concentration and wage inequality

Cortes, Guido Matias; Tschopp, Jeanne (2024). Rising concentration and wage inequality. The Scandinavian journal of economics, 126(2), pp. 320-354. Wiley 10.1111/sjoe.12547

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Wage inequality has risen in many countries over recent decades. At the same time, production has become increasingly concentrated in a small number of firms. In this paper, we show that these two phenomena are linked. Theoretically, we show that an increase in consumer price sensitivity will lead to an increase in the sectoral concentration of revenues and employment, as well as an increase in wage dispersion between firms within industries. 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 between-firm wage inequality. We show that this is driven by higher market shares and higher wages in high-productivity firms within more concentrated sectors.

Item Type:

Journal Article (Original Article)

Division/Institute:

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

UniBE Contributor:

Tschopp, Jeanne

Subjects:

300 Social sciences, sociology & anthropology > 330 Economics

ISSN:

1467-9442

Publisher:

Wiley

Language:

English

Submitter:

Julia Alexandra Schlosser

Date Deposited:

29 Nov 2023 15:39

Last Modified:

17 Apr 2024 00:12

Publisher DOI:

10.1111/sjoe.12547

BORIS DOI:

10.48350/189411

URI:

https://boris.unibe.ch/id/eprint/189411

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