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Firm Heterogeneity in Capital–Labour Ratios and Wage Inequality

Bibliographic Data

ID9714859
AuthorsMarco Leonardi (0000-0002-7989-1162, University of Milan, corresponding author)
Year2007
Volume117
Issue518
Pages375-398
Publication date2007-03-01
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueThe Economic Journal (JOURNAL)
Journal identifiersISSN: 0013-0133 • E-ISSN: 1468-0297
PublisherOxford University Press (OUP) (PUBLISHER)
DOI10.1111/j.1468-0297.2007.02022.x
OpenAlexW1535532230
LanguageEN
Citations received10
References cited22

This article documents the increasing dispersion of capital-labour ratios across firms in the US and provides some empirical evidence of a positive correlation at the two-digit industry level between the dispersion of capital-labour ratios across firms and residual wage inequality. To explain this empirical fact, the article adopts a search model where the exogenous decline in the relative price of equipment capital makes the distribution of capital-labour ratios more dispersed and increases wage dispersion among identical workers. OLS estimates of the relationship between capital dispersion and the relative price of equipment capital support the main hypothesis of the model. Copyright 2007 The Author(s). Journal compilation Royal Economic Society 2007

Capital (architecture · Dispersion (optics · Distribution (mathematics · Economics · Efficiency wage · Empirical evidence · Inequality · Labour economics · Wage · Wage dispersion · Wage Inequality · Firm Innovation and Growth · Labor market dynamics and wage inequality · Mathematics · Regional Economics and Spatial Analysis

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Unique citing works10
Citations per year0,48
Citation span2005 - 2025 (21)
Citation velocityrecent
Highly citedNo
Citation typesNeutral: 10

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