Rising between-workplace inequalities in high-income countries
Donald Tomaskovic-Devey1, Anthony Rainey2, Dustin Avent-Holt3
1Department of Sociology, University of Massachusetts, Amherst, MA, 01003; tomaskovic-devey@soc.umass.edu.
Summary
Rising income inequality is increasingly linked to growing wage gaps between workplaces, not just within them. Stronger employment protections correlate with lower and slower growth in these between-workplace earnings inequalities.
Area of Science:
- Socioeconomics
- Labor Economics
- Comparative Institutional Analysis
Background:
- Global rise in earnings inequality across high-income nations.
- Uncertainty regarding workplace dynamics' role in income inequality.
- Variations in within- and between-workplace inequality across countries and institutional contexts.
Purpose of the Study:
- To analyze changes in market income distribution between and within firms.
- To examine the role of national labor market institutions in moderating inequality.
- To understand trends in earnings inequality across diverse high-income countries.
Main Methods:
- Analysis of over 2 billion job-years and 50 million workplace-years.
- Utilized administrative records from 14 high-income countries.
- Comparative analysis of income distribution and labor market institutions.
Main Results:
- Significant variation in earnings inequality levels and trends across countries.
- Consistent growth in the between-workplace share of wage inequality globally.
- Lower inequality and slower growth in countries with stronger employment protections.
Conclusions:
- Between-workplace wage inequality is a significant driver of overall income inequality.
- Firm-level restructuring and inter-workplace wage gaps are critical factors.
- National labor market institutions play a crucial role in mitigating earnings inequality.
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