Working Paper: NBER ID: w29920
Authors: 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.
Keywords: No keywords provided
JEL Codes: J21; J31
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| rising between-industry dispersion (L19) | increase in earnings inequality (D31) |
| high-paying and low-paying industries (J31) | rising between-industry dispersion (L19) |
| increased sorting of high and low wage workers (J69) | rising earnings inequality (D33) |
| increased covariance between industry premia and worker characteristics (J79) | increased sorting of high and low wage workers (J69) |
| increased segregation of worker characteristics across industries (J79) | rising earnings inequality (D33) |
| mega firms (L10) | increase in earnings differentials for high-paying occupations (J31) |
| low-paying industries (J46) | decline in earnings differentials (J31) |