Corporations and economic inequality around the world: The paradox of hierarchy

What is it about?

This paper finds a strong, negative relationship between the proportion of workers employed by the largest firms (i.e., employment concentration) in United States and levels of income inequality. We also find some evidence of a similar relationship cross-nationally. We provide an explanation for why greater levels of large-firm employment may help compress wages in the labor market.

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Why is it important?

It's the first paper to discuss and find a relationship between large-firm employment and societal rates of income inequality.