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Industries, Mega Firms, and Increasing Inequality

Author

Listed:
  • Haltiwanger, John C.

    (University of Maryland)

  • Hyatt, Henry R.

    (U.S. Census Bureau)

  • Spletzer, James R.

    (Independent Researcher)

Abstract

Most of the rise in overall earnings inequality is accounted for by rising between-industry dispersion from about ten percent of 4-digit NAICS industries. These thirty industries are in the tails of the earnings distribution, and are clustered especially in high-paying high-tech and low-paying retail sectors. The remaining ninety percent of industries contribute little to between-industry earnings inequality. The rise of employment in mega firms is concentrated in the thirty industries that dominate rising earnings inequality. Among these industries, earnings differentials for the mega firms relative to small firms decline in the low-paying industries but increase in the high-paying industries. We also find that increased sorting and segregation of workers across firms mainly occurs between industries rather than within industries.

Suggested Citation

  • Haltiwanger, John C. & Hyatt, Henry R. & Spletzer, James R., 2022. "Industries, Mega Firms, and Increasing Inequality," IZA Discussion Papers 15197, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp15197
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    References listed on IDEAS

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    2. Torrent-Sellens, Joan, 2024. "Digital transition, data-and-tasks crowd-based economy, and the shared social progress: Unveiling a new political economy from a European perspective," Technology in Society, Elsevier, vol. 79(C).
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    7. Hu, Ruiyang & Wang, Jian & Yang, Yibai & Zheng, Zhijie, 2024. "Inflation and income inequality in an open-economy growth model with liquidity constraints on R&D," Journal of International Money and Finance, Elsevier, vol. 147(C).
    8. Pawe{l} Gola & Yuejun Zhao, 2024. "A Firm Link: Overall, Between- and Within-Firm Inequality Through the Lens of a Sorting Model," Papers 2410.11532, arXiv.org.
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    10. Trouvain, Florian, 2024. "Technology Adoption, Innovation, and Inequality in a Global World," VfS Annual Conference 2024 (Berlin): Upcoming Labor Market Challenges 302377, Verein für Socialpolitik / German Economic Association.
    11. Gordon H. Hanson & Enrico Moretti, 2025. "Where Have All the Good Jobs Gone? Changes in the Geography of Work in the US, 1980-2021," NBER Working Papers 33631, National Bureau of Economic Research, Inc.

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    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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