Rising income inequality is now recognized as a widespread problem in high income countries. While the broad trajectories of national income and wealth inequalities are apparent, little is known about the workplace and institutional dynamics that produce these disturbing trends. In this project we investigate the dynamics of workplace earnings distributions, taking advantage of high quality administrative data on nearly all private sector workplaces and their employees for ten countries (Czech Republic, France, Germany, Hungary, the Netherlands, Norway, Slovenia, South Korea, Sweden, Denmark, Japan, Canada, and the U.S.) to examine workplace level inequality levels and trends. As such, we bring workplaces and production into the center of the analysis of national inequality distributions, levels and trajectories.
We are exploring two central questions: What factors drive overall income inequality within and between workplaces? How do workplaces exacerbate or mitigate the impact of individual distinctions, such as education level, gender or immigrant status? Our unique comparative population level data design allow us to address these two questions in both cross- and sub-national temporal contexts, asking: How do inequality generating mechanisms vary as a function of institutional context?
Scientific Contributions. This project will make four scientific contributions. First, it empirically unpacks the central role organizations play in creating inequality, and simultaneously demonstrates the possibility for mitigating inequality through organizational interventions. Second, the organizational approach leads to an empirical strategy that focuses directly on the links between individuals and organizations, and organizations and national contexts, dissolving the micro-macro divide typical of much empirical social science. Concurrently, by bringing an unprecedented comparative lens to Linked Employer-Employee Panel data this project will produce fundamentally new insights as to the intersection of generic processes and institutional contexts in inequality generation. Third, we develop and apply new sampling and estimation methodologies for analyzing and comparing Linked Employer-Employee Panel data. Fourth, the project elaborates Relational Inequality Theory, building on propositions that focus on the intersection of various social statuses in workplace divisions of labor, providing general predictions as to the organizational generation of inequality.
Policy Context. Policy debates about inequality primarily focus on government redistribution at the national level, often ignoring that income distributions have become more unequal because of workplace compensation and pay practice shifts. This study helps uncover the potential for interventions via educational investments, equal opportunity enforcement, wage floors and ceilings, and other institutional interventions that influence organizational variation in inequalities. Better understanding and documenting why some firms produce less inequality than others will provide a powerful counter-narrative to the idea that inequality is a naturally occurring process.
Exploring organizational variation within and between countries will reveal the range of inequality regimes compatible with contemporary product and labor market constraints. Further, by linking gender and ethnic/citizenship inequalities to the structure of workplace inequality dynamics we may reveal new paths for increasing social inclusion of historically marginalized groups.