Trade Shocks, Firm Hierarchies, and Wage Inequality

• 成果类型: Article
• 署名作者: Friedrich, Benjamin U.
• 署名单位: Aarhus University; Northwestern University
• 刊物名称: REVIEW OF ECONOMICS AND STATISTICS
• ISSN/ISSBN: 0034-6535
• DOI: 10.1162/rest_a_00998
• 发表日期: 2022-07
• 页码: 652-667
• 关键词: panel-data; flattening firm; exports; income; LIBERALIZATION; ORGANIZATION; performance; QUALITY; IMPACT; pay

摘要

This paper shows robust effects of trade shocks on within-firm wage inequality through changes in firm hierarchies. It uses two distinct research designs-one considering firm-level shocks to foreign demand and transportation costs, the other analyzing the Muslim boycott of Danish exports after the 2006 cartoon crisis. Consistent with knowledge-based and incentive-based hierarchy models, trade shocks affect organizational choices through production scale. Adding a hierarchy layer increases inequality throughout the organization, particularly widening the 90-50 wage gap and pay differences between top and bottom layers. Delayering after the boycott leads to wage compression through wage cuts, demotions, and employee turnover.