The great divergence(s)

Berlingieri, Giuseppe, Blanchenay, Patrick and Criscuolo, Chiara ORCID: 0000-0002-0428-7884 (2024) The great divergence(s). Research Policy, 53 (3). ISSN 0048-7333

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Abstract

This paper provides new evidence on the increasing dispersion in wages and productivity using a unique micro-aggregated firm-level data source, representative for the full population of firms in 12 countries. First, we document an increase in wage and productivity dispersions, for both manufacturing and market services, and show that the increase is mainly driven by the bottom of the wage and productivity distributions. Second, we show that between-firm wage dispersion increased more in sectors that experienced an increase in productivity dispersion; the estimated elasticity is larger at the bottom than at the top of the wage/productivity distributions, consistent with a framework in which more productive firms charge higher mark-ups and/or larger wage mark-downs. Third, we find that both globalisation and digitalisation strengthen the link between productivity and wage dispersion. Our results suggest that policies designed to mitigate wage inequality must take into consideration gaps between firms of the same sectors, and how both globalisation and digitalisation affect these gaps.

Item Type:	Article
Official URL:	https://www.sciencedirect.com/journal/research-pol...
Additional Information:	© 2024 The Author(s)
Divisions:	Centre for Economic Performance LSE
Subjects:	H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
Date Deposited:	16 Feb 2024 14:39
Last Modified:	01 Apr 2024 07:19
URI:	http://eprints.lse.ac.uk/id/eprint/122046

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