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Sources of wage inequality

Akerman, Anders and Helpman, Elhanan and Itskhoki, Oleg and Muendler, Marc-Andreas and Redding, Stephen (2013) Sources of wage inequality. American Economic Review, 103 (3). pp. 214-219. ISSN 0002-8282

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Identification Number: 10.1257/aer.103.3.214

Abstract

Recent theories of firm heterogeneity emphasize between-firm wage differences as a new mechanism through which trade can affect wage inequality. Using linked employer-employee data for Sweden, we show that many of the stylized facts about wage inequality found in Helpman et al. (2012) for Brazil also hold for Sweden. Much of overall wage inequality arises within sector-occupations and for workers with similar observable characteristics. One notable difference is a smaller contribution from between-firm differences in wages in Sweden, which could reflect the influence of Swedish labor market institutions in dampening the scope for variation in wages between firms through collective wage agreements.

Item Type: Article
Official URL: https://www.aeaweb.org/aer/papers.php
Additional Information: © 2013 American Economic Association
Subjects: H Social Sciences > HC Economic History and Conditions
H Social Sciences > HD Industries. Land use. Labor
H Social Sciences > HV Social pathology. Social and public welfare. Criminology
JEL classification: F - International Economics > F1 - Trade > F13 - Commercial Policy; Protection; Promotion; Trade Negotiations; International Trade Organizations
F - International Economics > F1 - Trade > F16 - Trade and Labor Market Interactions
J - Labor and Demographic Economics > J2 - Time Allocation, Work Behavior, and Employment Determination and Creation; Human Capital; Retirement > J24 - Human Capital; Skills; Occupational Choice; Labor Productivity
J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J31 - Wage Level and Structure; Wage Differentials by Skill, Training, Occupation, etc.
Sets: Research centres and groups > Centre for Economic Performance (CEP)
Date Deposited: 02 Sep 2014 11:32
Last Modified: 05 Sep 2014 15:18
Funders: National Science Foundation, Jan Wallander and Tom Hedelius’ Foundation, Swedish Research Council
URI: http://eprints.lse.ac.uk/id/eprint/59338

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