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Firm Heterogeneity in Capital/Labor Ratios and Wage Inequality

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dc.creator Leonardi, Marco
dc.date 2003
dc.date.accessioned 2013-10-16T07:08:58Z
dc.date.available 2013-10-16T07:08:58Z
dc.date.issued 2013-10-16
dc.identifier http://hdl.handle.net/10419/20146
dc.identifier ppn:372807232
dc.identifier.uri http://koha.mediu.edu.my:8181/xmlui/handle/10419/20146
dc.description This paper provides some empirical evidence and a theory of the relationship between residual wage inequality and the increasing dispersion of capital/labor ratios across firms. I document the increasing variance of capital/labor ratios across firms in the US labor market. I also show that the increase in the capital intensity variance across firms is associated with the increasing wage variance across workers. To explain this empirical fact, I adopt a search model where firms differ in their optimal capital investment. The decline in the relative price of equipment capital makes the firm distribution of capital/labor ratios more dispersed. In a frictional labor market, this force generates wage dispersion among identical workers. Simple calibration of the model indicates that the dispersion of capital/labor ratios can account for about one third of the total increase in residual wage inequality.
dc.language eng
dc.publisher
dc.relation IZA Discussion paper series 909
dc.rights http://www.econstor.eu/dspace/Nutzungsbedingungen
dc.subject J31
dc.subject J21
dc.subject ddc:330
dc.subject wage inequality
dc.subject capital intensity
dc.subject search models
dc.subject Lohnstruktur
dc.subject Branche
dc.subject Faktorintensität
dc.subject Arbeitsnachfrage
dc.subject Arbeitsuche
dc.subject Suchtheorie
dc.subject Investition
dc.subject Theorie
dc.subject Vereinigte Staaten
dc.title Firm Heterogeneity in Capital/Labor Ratios and Wage Inequality
dc.type doc-type:workingPaper


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