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CANCELLED: CSES Colloquium Series "Aligning Inequalities: Organizational Sources of Wage Inequality, 1999-2018"- Nathan Wilmers

Friday, April 17, 2020 at 3:30pm to 5:00pm

Uris Hall, G08

Nathan Wilmers, Professor

Work and Organization Studies

MIT Sloan

"The two main sources of pay premiums in the US labor market---occupation and workplace---have increasingly coalesced into a single axis of advantage.  High- and low-skilled occupations are more likely to be employed at corresponding high- and low-paying workplaces.  Drawing on restricted-use US occupation-by-workplace microdata, we show that half of increased wage inequality since 1999 is due to this rising correlation between workplace and occupation premiums.  What drives increased alignment between workplace- and occupation-based pay premiums?  We rule out firm entry and exit and shifting industry composition.  The main source of alignment is within-organization changes in job structure and pay levels.  Consistent with prior research, some is due to the rise of star firms and to increased outsourcing.  A smaller part is attributable to pay cuts and upskilling by high-paying employers of low-skilled workers, like those in manufacturing and transportation.  But, the largest source of increased alignment is that some low-paying but high-professional share workplaces, like hospitals and schools, have deskilled their jobs, while others have raised pay.  These sectors are often government regulated or run, suggesting scope for policy interruption of this process.  Broadly, the results demonstrate an understudied way that organizations affect the wage distribution: not by directly affecting inequality in workplace or occupational premiums, but by aligning these two sources of advantage."

Sponsored by the Center for the Study of Economy and Society

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