Firm-level distributional dynamics: Labour share in Italian medium-large firms

Abstract

In this paper, we explore the main drivers of firm-level labour share focusing on a sample of medium-large Italian firms. Taking advantage of the Rilevazione Imprese e Lavoratori (RIL) run by Inapp in 2010 and 2015, we explore the main drivers of changes in labour share on a heterogeneous sample of firms emphasizing different mechanisms at work among those firms showing higher labour share and firms with lower labour share. The results suggest an overall pattern of polarization: “more unequal firms” register a decline in labour share over the crisis, while the so-called “more equal firms” show an increase of the labour share even during the crisis period.