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http://dspace.mediu.edu.my:8181/xmlui/handle/10419/20146| Title: | Firm Heterogeneity in Capital/Labor Ratios and Wage Inequality |
| Keywords: | J31 J21 ddc:330 wage inequality capital intensity search models Lohnstruktur Branche Faktorintensität Arbeitsnachfrage Arbeitsuche Suchtheorie Investition Theorie Vereinigte Staaten |
| Issue Date: | 16-Oct-2013 |
| Publisher: | |
| 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. |
| URI: | http://koha.mediu.edu.my:8181/xmlui/handle/10419/20146 |
| Other Identifiers: | http://hdl.handle.net/10419/20146 ppn:372807232 |
| Appears in Collections: | EconStor |
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