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Sources of wage inequality

Author

Listed:
  • Akerman, Anders
  • Helpman, Elhanan
  • Itskhoki, Oleg
  • Muendler, Marc-Andreas
  • Redding, Stephen

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.

Suggested Citation

  • Akerman, Anders & Helpman, Elhanan & Itskhoki, Oleg & Muendler, Marc-Andreas & Redding, Stephen, 2013. "Sources of wage inequality," LSE Research Online Documents on Economics 59338, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:59338
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    File URL: https://researchonline.lse.ac.uk/id/eprint/59338/
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    References listed on IDEAS

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    1. Elhanan Helpman & Oleg Itskhoki & Marc-Andreas Muendler & Stephen J. Redding, 2017. "Trade and Inequality: From Theory to Estimation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 84(1), pages 357-405.
    2. Carl Davidson & Steven J. Matusz, 2010. "International Trade with Equilibrium Unemployment," Economics Books, Princeton University Press, edition 1, number 9075, December.
    3. Hartmut Egger & Udo Kreickemeier, 2017. "Firm Heterogeneity and the Labor Market Effects of Trade Liberalization," World Scientific Book Chapters, in: International Trade and Labor Markets Welfare, Inequality and Unemployment, chapter 10, pages 265-306, World Scientific Publishing Co. Pte. Ltd..
    4. repec:oup:restud:v:84:y::i:1:p:357-405. is not listed on IDEAS
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    More about this item

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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