Industries, Mega Firms, and Increasing Inequality

77 Pages Posted: 11 Apr 2022 Last revised: 18 Jul 2022

See all articles by John Haltiwanger

John Haltiwanger

University of Maryland - Department of Economics; National Bureau of Economic Research (NBER); Institute for the Study of Labor (IZA)

Henry Hyatt

U.S. Census Bureau

James Spletzer

U.S. Census Bureau - Center for Economic Studies

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Date Written: April 2022

Abstract

Most of the rise in overall earnings inequality is accounted for by rising between-industry dispersion from about ten percent of 4-digit NAICS industries. These thirty industries are in the tails of the earnings distribution, and are clustered especially in high-paying high-tech and low-paying retail sectors. The remaining ninety percent of industries contribute little to between-industry earnings inequality. The rise of employment in mega firms is concentrated in the thirty industries that dominate rising earnings inequality. Among these industries, earnings differentials for the mega firms relative to small firms decline in the low-paying industries but increase in the high-paying industries. We also find that increased sorting and segregation of workers across firms mainly occurs between industries rather than within industries.

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Suggested Citation

Haltiwanger, John C. and Hyatt, Henry and Spletzer, James, Industries, Mega Firms, and Increasing Inequality (April 2022). NBER Working Paper No. w29920, Available at SSRN: https://ssrn.com/abstract=4080660

John C. Haltiwanger (Contact Author)

University of Maryland - Department of Economics ( email )

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National Bureau of Economic Research (NBER) ( email )

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Institute for the Study of Labor (IZA) ( email )

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Henry Hyatt

U.S. Census Bureau

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D.C., WA 20233
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James Spletzer

U.S. Census Bureau - Center for Economic Studies ( email )

4600 Silver Hill Road
Washington, DC 20233-9100
United States

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