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Inequality of individual wages and the dispersion of firm productivity

Faggio, Giulia, Salvanes, Kjell G. and Van Reenen, John (2008) Inequality of individual wages and the dispersion of firm productivity. Centrepiece, 12 (3). pp. 18-20. ISSN 1362-3761

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Many blame globalisation for growing wage inequality in the UK. But according to research by Giulia Faggio, Kjell Salvanes and John Van Reenen, the rise in inequality is better explained by increasing dispersion in the productivity of firms related to their use of new technology. Their study finds that much of the rise in wage inequality is driven by increasing differences in wages among firms in the same industry. A major driver of such differences is firms’ varying ability to make use of new technology. This is particularly felt in the service sector.

Item Type: Article
Official URL:
Additional Information: © 2008 Centre for Economic Performance, London School of Economics and Political Science
Library of Congress subject classification: H Social Sciences > HC Economic History and Conditions
H Social Sciences > HD Industries. Land use. Labor
Journal of Economic Literature Classification System: D - Microeconomics > D6 - Welfare Economics > D63 - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Employment, and Investment > E24 - Macroeconomics: Employment; Unemployment; Wages; Intergenerational Income Distribution (includes wage indexation)
Sets: Collections > Economists Online
Research centres and groups > Centre for Economic Performance (CEP)
Departments > Economics
Collections > CentrePiece
Identification Number: CEPCP244
Date Deposited: 02 May 2008 09:36

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