Decomposing the Sources of Earnings Inequality: Assessing the Role of Reallocation

Fredrik Andersson, Elizabeth E. Davis, Matthew L. Freedman, Julia I. Lane, Brian P. Mccall, Kristin Sandusky

Research output: Contribution to journalArticlepeer-review


This study exploits longitudinal employer-employee matched data from the U.S. Census Bureau to investigate the contribution of worker and firm reallocation to changes in earnings inequality within and across industries between 1992 and 2003. We find that factors that cannot be measured using standard cross-sectional data, including the entry and exit of firms and the sorting of workers across firms, are important sources of changes in earnings distributions over time. Our results also suggest that the dynamics driving changes in earnings inequality are heterogeneous across industries.

Original languageEnglish (US)
Pages (from-to)779-810
Number of pages32
JournalIndustrial Relations
Issue number4
StatePublished - Oct 2012

ASJC Scopus subject areas

  • Industrial relations
  • Strategy and Management
  • Organizational Behavior and Human Resource Management
  • Management of Technology and Innovation


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