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| Author: | Leonardi, M. |
| Title: | Firm heterogeneity in capital-labour ratios and wage inequality |
| Journal: | Economic Journal
2007 : MAR, VOL. 117:518, p. 375-398 |
| Index terms: | capital inequality labour pay |
| Language: | eng |
| Abstract: | The paper documents the increasing dispersion of capital-labour ratios across companies in the US and provides some empirical evidence on its positive correlation at the two-digit industry level between the dispersion of capital-labour ratios across companies and residual wage inequality. The study explains this empirical fact by adopting 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. |
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