1. Reconsidering the Causes of Rising Wage Inequality: The Role of Corporate Restructuring.
- Author
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McCall, Leslie
- Subjects
ORGANIZATIONAL change ,EQUALITY ,CORPORATE reorganizations ,LABOR market - Abstract
Organizational changes have received little scholarly attention as a cause of rising wage inequality and yet corporate restructuring has been widespread. This paper focuses on one piece of this relationship: the impact of firm size and subcontracting employment on levels and changes in wage inequality in U.S. cities over the past three decades. Several important conclusions can be drawn, especially given the consistency of the results across a wide range of model specifications, measures of the organizational structure of urban labor markets, functional forms of the variables, and measures of wage inequality (the 90th/10th, 90th/50th, and 50th/10th). Organizational structures associated with more formal and equitable employment relations?as measured by larger average firm size, more employment in large firms, and less employment in subcontracting industries?are strongly associated with lower levels of wage inequality. These findings hold for levels as well as changes in organizational structure and wage inequality. These findings suggest that as organizational structures have moved away from these forms, wage inequality has increased. Perhaps as important, the findings further suggest that these organizational forms no longer have the impact they once had (so it would not matter whether the size distribution of firms has changed dramatically or not, which is a matter of debate). Measures of large firm size did not reduce levels of inequality in 1989, as they did in 1969 and 1979. Likewise, as of 1989, subcontracting employment was no longer a distinguishing feature of unequal labor markets as it was in 1969 and 1979. These transformations also fit very well with the timing of rising wage inequality and the spread of firm-level changes in the 1980s. [ABSTRACT FROM AUTHOR]
- Published
- 2004
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