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Industries, Mega Firms, and Increasing Inequality

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  • John C. Haltiwanger
  • Henry R. Hyatt
  • James Spletzer

Abstract

Most of the rise in overall earnings inequality is accounted for by rising between-industry dispersion from ten percent of 4-digit NAICS industries. These thirty industries are clustered especially in high-paying high-tech and low-paying retail sectors. The rise of employment in mega firms is concentrated in the industries that dominate rising earnings inequality. Earnings differentials for the mega firms relative to small firms decline in the low-paying industries but increase in the high-paying industries. A critical component accounting for the rising dispersion in the top thirty industries is an increasing covariance between industry premia and worker characteristics associated with high earnings.

Suggested Citation

  • John C. Haltiwanger & Henry R. Hyatt & James Spletzer, 2022. "Industries, Mega Firms, and Increasing Inequality," NBER Working Papers 29920, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:29920
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    References listed on IDEAS

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    Cited by:

    1. Sebastian Doerr & Thomas Drechsel & Donggyu Lee, 2022. "Income Inequality and Job Creation," Staff Reports 1021, Federal Reserve Bank of New York.
    2. Jose Garcia-Louzao & Alessandro Ruggieri, 2023. "Labor Market Competition and Inequality," CESifo Working Paper Series 10829, CESifo.
    3. David Card & Jesse Rothstein & Moises Yi, 2024. "Industry Wage Differentials: A Firm-Based Approach," Journal of Labor Economics, University of Chicago Press, vol. 42(S1), pages 11-59.
    4. Hervé, Justine, 2023. "Specialists or generalists? Cross-industry mobility and wages," Labour Economics, Elsevier, vol. 84(C).
    5. Agnes Norris Keiller & Tim Obermeier & Andreas Teichgraeber & John Van Reenen, 2024. "An engine of (pay) growth? Productivity and wages in the UK auto industry," CEP Discussion Papers dp2015, Centre for Economic Performance, LSE.
    6. 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.
    7. 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.

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    More about this item

    JEL classification:

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

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