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Abstract: Recent theories of firm heterogeneity emphasize between-firm wage differences as a new mechanism through which trade can affect wage inequality. Using linked employer-employee data for Sweden, we show that many of the stylized facts about wage inequality found in Helpman et al. (2012) for Brazil also hold for Sweden. Much of overall wage inequality arises within sector-occupations and for workers with similar observable characteristics. One notable difference is a smaller contribution from between-firm differences in wages in Sweden, which could reflect the influence of Swedish labor market institutions in dampening the scope for variation in wages between firms through collective wage agreements.
Publication Date: May-2013
Citation: Akerman, Anders, Helpman, Elhanan, Itskhoki, Oleg, Muendler, Marc-Andreas, Redding, Stephen. (2013). Sources of Wage Inequality. American Economic Review, 103 (3), 214 - 219. doi:10.1257/aer.103.3.214
DOI: doi:10.1257/aer.103.3.214
ISSN: 0002-8282
Pages: 214 - 219
Type of Material: Journal Article
Journal/Proceeding Title: American Economic Review
Version: Final published version. Article is made available in OAR by the publisher's permission or policy.

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