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This paper links data on establishments and individuals to analyze the role of establishments in the increase in inequality that has become a central topic in economic analysis and policy debate. It decomposes changes in the variance of log earnings among individuals into the part due to changes...
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agents in a highly non-linear incentive system, we find that the improvement in productivity far outweighed the costs … accordingly focus more on the productivity-enhancing than on the distortionary effects. …
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