What drives Income Inequality at the Firm - Level? Literature Review based on Recent Trends in Germany and the U.S.

Abstract or Introduction

This thesis will concern research on causes of income inequality, it asks the following question: What drives income inequality at the firm-level? More precisely this would entail the questions: What influences the development of market earnings inequality between firms, understood as establishments? What influences the development of market earnings inequality between firms, understood as distinct corporate units?

I start my thesis with two recent articles that adress these questions and that employ a similar methodology to different countries. The first one is a paper by David Card, J¨org Heining and Patrick Kline Card et al. (CHK), the second one is by Jae Song, David J. Price, Fatih Guvenen, Nicholas Bloom and Till von Wachter Song et al. (SPG). CHK is concerned with firms as establishments in Germany and SPG with firms as corporate units in the U.S. Both articles are concerned with more than just between-firm inequality. For brevities sake the parts on their other research concerns will be mentioned, but not as in-depth as the parts that concern between-firm inequality.