Wage Inequality and Firm Growth
Holger M. Mueller, Paige P. Ouimet, Elena Simintzi
American Economic Review · 2017 · Volume 107 · Issue 5
Abstract
We discuss firm-level evidence based on UK data showing that within-firm pay inequality--wage differentials between top- and bottom-level jobs--increases with firm size. Moreover, within-firm pay inequality rises as firms grow larger over time. Lastly, using wage data from 15 developed countries, we document a positive association between aggregate wage inequality at the country level and growth by the largest firms in the country. We conclude that part of what may be perceived as a global trend toward more wage inequality may be driven by an increase in the size of the largest firms in the economy.
Keywords
Firm Behavior: Empirical Analysis, Wage Level and Structure, Wage Differentials, Labor Discrimination, Firm Performance: Size, Diversification, and Scope, Personnel Economics: Compensation and Compensation Methods and Their Effects
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