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Establishment Turnover and the Evolution of Wage Inequality

Author

Listed:
  • Anabela Carneiro

    (Universidade do Porto and CEF.UP)

  • José Varejão

    (Universidade do Porto and CEF.UP)

Abstract

We consider the determinants of the evolution of wage inequality in the context of the literature on entry and exit of establishments. Using several measures of wage inequality (overall, within-group, and between-groups), we conclude that shutdowns reduce overall and within-group inequality because they eliminate low-pay jobs. Startups increase wage inequality between age and, especially, education groups, because newly-created establishments make staffing choices that are different from those made by continuously-operating establishments and establishments that shut down.

Suggested Citation

  • Anabela Carneiro & José Varejão, 2012. "Establishment Turnover and the Evolution of Wage Inequality," CEF.UP Working Papers 1202, Universidade do Porto, Faculdade de Economia do Porto.
    • Handle: RePEc:por:cetedp:1202
    as

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    References listed on IDEAS

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    More about this item

    Keywords

    Wage Inequality; Labor Demand; Establishment Turnover.;
    All these keywords.

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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