Inequality Between And Within Firms

Download or read book Inequality Between and Within Firms written by Felipe Benguria and published by . This book was released on 2015 with total page 56 pages. Available in PDF, EPUB and Kindle. Book excerpt: Using a linked employer-employee census for Brazil, this paper studies the relative importance of inequality between and within firms in explaining both levels and changes over time in overall earnings inequality. During the 1999-2013 period, the sharp decline in overall inequality in Brazil has been driven mostly by a drop in between-firm inequality. Within-firm inequality has only fallen slightly, increasing its share in overall inequality to about 44 percent by the end of this period. Estimating an earnings model that decomposes wages into worker and firm fixed effects, I find that between-firm inequality in the cross-section is explained mostly (57%) by variation across firms in the worker fixed effects. The change in between-firm inequality over this period is explained primarily by variation in the worker fixed effects, but the variation in firm fixed effects is almost as important.