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Cited by 1,337

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Workplace Heterogeneity and the Rise of West German Wage Inequality*

Card, David, Heining, Jörg, Kline, Patrick·2013·The Quarterly Journal of Economics

Abstract

We study the role of establishment-specific wage premiums in generating recent increases in West German wage inequality. Models with additive fixed effects for workers and establishments are fit into four subintervals spanning the period from 1985 to 2009. We show that these models provide a good approximation to the wage structure and can explain nearly all of the dramatic rise in West German wage inequality. Our estimates suggest that the increasing dispersion of West German wages has arisen from a combination of rising heterogeneity between workers, rising dispersion in the wage premiums at different establishments, and increasing assortativeness in the assignment of workers to plants. In contrast, the idiosyncratic job-match component of wage variation is small and stable over time. Decomposing changes in mean wages between different education groups, occupations, and industries, we find that increasing plant-level heterogeneity and rising assortativeness in the assignment of workers to establishments explain a large share of the rise in inequality along all three dimensions.

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Metadata

Authors
Card, D., Heining, J., & Kline, P.
Venue
The Quarterly Journal of Economics
Published
2013-05-02
Volume
128
Issue
3
Pages
967-1015
ISSN
  • 0033-5533 (ISSN-L)
  • 1531-4650
OpenAlex
W2141295263
Cited by
1,337
References
9
FWCI
141.97
Type
journal article
Language
en
Open access
closed

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CoChat. (2026). Citation check: Workplace Heterogeneity and the Rise of West German Wage Inequality*. https://app.cochat.ai/papers/10.1093/qje/qjt006
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Card, D., Heining, J., & Kline, P. (2013). Workplace Heterogeneity and the Rise of West German Wage Inequality*. The Quarterly Journal of Economics. https://doi.org/10.1093/qje/qjt006

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Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).

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