Income inequality: The consequences of skill-upgrading when firms have hierarchical organisational structures

Frederiksen, Anders and Poulsen, Odile (2016) Income inequality: The consequences of skill-upgrading when firms have hierarchical organisational structures. Economic Inquiry, 54 (2). pp. 1224-1239. ISSN 1465-7295

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Abstract

During the last three decades, most developed countries have experienced increasing income inequality. Using Danish register data from 1992 to 2007 for all private-sector employees, we confirm that income inequality has increased in Denmark. We also observe an increase in the relative employment of highly-educated individuals, as well as differential income growth rates across employee subgroups where, in particular, managers experienced significant real income progression. We use an equilibrium search framework with on-the-job search to derive the income distribution. In this model we can determine the management and education premia. We can also show that when our model is exposed to skill-upgrading it is capable of producing income dynamics similar to those observed in the Danish income distribution. (JEL J3, J6, M5)

Item Type: Article
Uncontrolled Keywords: income inequality,search model,skill-upgrading,organizational structure
Faculty \ School: Faculty of Social Sciences > School of Economics
Depositing User: Pure Connector
Date Deposited: 04 Mar 2016 09:30
Last Modified: 18 Jun 2020 23:47
URI: https://ueaeprints.uea.ac.uk/id/eprint/57373
DOI: 10.1111/ecin.12295

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