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Titel
Labour market power and between-firm wage (in)equality / Matthias Mertens
VerfasserMertens, Matthias
ErschienenHalle (Saale), Germany : Halle Institute for Economic Research (IWH) - Member of the Leibniz Association, [2021]
Ausgabe
This draft: May 18, 2021
Umfang1 Online-Ressource (III, 85 Seiten, 3,34 MB) : Diagramme
SpracheEnglisch
SerieIWH-Diskussionspapiere ; 2020, no. 13 (August 2020)
Schlagwörterinequality / labour market power / monopsony / rent-sharing / superstar firms
URNurn:nbn:de:gbv:3:2-137598 
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Labour market power and between-firm wage (in)equality [3.34 mb]
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I study how labour market power affects firm wage differences using German manufacturing sector firm-level data (1995-2016). In past decades labour market power increasingly moderated rising between-firm wage inequality. This is becausehigh-paying firms possess high and increasing labour market power and pay wages below competitive levels whereas low-wage firms pay competitive wages. Over time large high-wage high-productivity firms generate increasingly large labour market rents while selling on competitive product markets. This provides novel insights on why such "superstar firms" are profitable and successful. Using micro-aggregated data covering most economic sectors I validate my results for ten other European countries.