Reorganization of Firms and Labour Market Inequality
AbstractThis paper explores the implications of the ongoing reorganization of firms for inequality in the labour market. We show how recent technological advances in physical and human capital can lead to the breakdown of occupational barriers, creating demands for new combinations of skills, and thereby leading to new patterns of wage inequality. Specifically, our analysis indicates how the changes can segment the labour market into an expanding sector of restructured firms where wages are rising, a contracting sector of traditional firms where wages are relatively stagnant, and an expanding pool of the unemployed. The analysis helps explain various significant labour market phenomena, such as: the increased versatility of work; the widening dispersion of wages within occupational, educational, and job tenure groups in the United Kingdom and the United States, accompanied by a narrowing of the male-female wage differentials; the reorganization of firms from task-oriented departments to customer-oriented teams; and the breakdown of occupational barriers.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 1375.
Date of creation: Mar 1996
Date of revision:
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Other versions of this item:
- Lindbeck, Assar & Snower, Dennis J, 1996. "Reorganization of Firms and Labor-Market Inequality," American Economic Review, American Economic Association, vol. 86(2), pages 315-21, May.
- Lindbeck, A. & Snower, D.J., 1996. "Reorganization of Firms and Labor Market Inequality," Papers 605, Stockholm - International Economic Studies.
- Lindbeck, Assar & Snower, Dennis J., 1997. "Reorganization of Firms and Labor Market Inequality," Seminar Papers 605, Stockholm University, Institute for International Economic Studies.
- J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
- L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
- M12 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - Personnel Management; Executive Compensation
- O33 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Lindbeck, Assar & Snower, Dennis J., 1997.
"Restructuring Production and Work,"
602, Stockholm University, Institute for International Economic Studies.
- Milgrom, Paul & Roberts, John, 1995. "The Economics of Modern Manufacturing: Reply," American Economic Review, American Economic Association, vol. 85(4), pages 997-99, September.
- Holmstrom, Bengt & Milgrom, Paul, 1991. "Multitask Principal-Agent Analyses: Incentive Contracts, Asset Ownership, and Job Design," Journal of Law, Economics and Organization, Oxford University Press, vol. 7(0), pages 24-52, Special I.
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