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The great divergence(s)

Author

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  • Giuseppe Berlingieri
  • Patrick Blanchenay
  • Chiara Criscuolo

Abstract

This report provides new evidence on the increasing dispersion in wages and productivity using novel micro-aggregated firm-level data from 16 countries. First, the report documents an increase in wage and productivity dispersions, for both manufacturing and market services. Second, it shows that these trends are driven by differences within rather than across sectors, and that the increase in dispersion is mainly driven by the bottom of the distribution, while divergence at the top occurs only in the service sector, and only after 2005. Third, it suggests that between-firm wage dispersion is linked to increasing differences between high and low productivity firms. Fourth, it suggests that both globalisation and digitalisation imply higher wage divergence, but strengthen the link between productivity and wage dispersion. Finally, it investigates the impact of minimum wage, employment protection legislation, trade union density, and coordination in wage setting on wage dispersion and its link to productivity dispersion.

Suggested Citation

  • Giuseppe Berlingieri & Patrick Blanchenay & Chiara Criscuolo, 2017. "The great divergence(s)," OECD Science, Technology and Industry Policy Papers 39, OECD Publishing.
  • Handle: RePEc:oec:stiaac:39-en
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    File URL: http://dx.doi.org/10.1787/953f3853-en
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    Cited by:

    1. Ricardo Pinheiro Alves, 2017. "Portugal: a Paradox in Productivity," GEE Papers 0070, Gabinete de Estratégia e Estudos, Ministério da Economia, revised Jun 2017.
    2. Mauro Caselli & Stefano Schiavo & Lionel Nesta, 2017. "Markups and markdowns," Documents de Travail de l'OFCE 2017-11, Observatoire Francais des Conjonctures Economiques (OFCE).
    3. Koji Nakamura & Sohei Kaihatsu & Tomoyuki Yagi, 2018. "Productivity Improvement and Economic Growth," Bank of Japan Working Paper Series 18-E-10, Bank of Japan.
    4. Yuichiro Matsumoto, 2018. "Endogenous Sunk Cost, Scale Economies, and Market Concentration," Discussion Papers in Economics and Business 18-20, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP).
    5. Emilien Gouin-Bonenfant, 2018. "Productivity Dispersion, Between-firm Competition and the Labor Share," 2018 Meeting Papers 1171, Society for Economic Dynamics.

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