American Economic Review Vol. 103 No. 3 2013

Sources of Wage Inequality

Anders Akerman¹; Elhanan Helpman²; Oleg Itskhoki³; Marc-Andreas Muendler⁴; Stephen J. Redding³

¹ Stockholm University, Department of Economics, Stockholm, SE-106 91, Sweden. · ² Harvard University, Department of Economics, 1805 Cambridge Street, Cambridge, MA 02138 and CIFAR. · ³ Princeton University, Department of Economics, Princeton, NJ 08544 and WWS. · ⁴ UC San Diego, Department of Economics, 9500 Gilman Dr. MC 0508, La Jolla, CA 92093.

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.

DOI

10.1257/aer.103.3.214

Volume

103

Issue

3

Pages

214-219

Language

en

Sources

bibtex:phds-export.bib openalex crossref

Cite

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