Workforce composition, productivity and pay. The role of firms in wage inequality
Criscuolo, Chiara ; Hijzen, Alexander ; Barth, Erling ; Chen, Wen Hao ; Fabling, Richard ; Fialho, Priscilla ; Grabska, Katarzyna ; Kambayashi, Ryo ; Leidecker, Timo ; Nordström Skans, Oskar ; Riom, Capucine ; Stadler, Balazs ; Upward, Richard ; Zwysen, Wouter
Organisation for Economic Co-operation and Development, Paris
OECD Publishing - Paris
2020
46 p.
wage differential ; wages ; productivity ; enterprise level
OECD Social, Employment and Migration Working Papers
241
Wages and wage payment systems
https://doi.org/10.1787/0830227e-en
English
Bibliogr.
"In many OECD countries, low productivity growth has coincided with rising inequality. Widening wage and productivity gaps between firms may have contributed to both developments. This paper uses a new harmonised cross-country linked employer-employee dataset for 14 OECD countries to analyse the role of firms in wage inequality. The main finding is that, on average across countries, changes in the dispersion of average wages between firms explain about half of the changes in overall wage inequality. Two thirds of these changes in between-firm wage inequality are accounted for by changes in productivity-related premia that firms pay their workers above common market wages. The remaining third can be attributed to changes in workforce composition, including the sorting of high-skilled workers into high-paying firms."
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