The Great Separation: Top Earner Segregation at Work in High-Income Countries

Earnings segregation at work is an understudied topic in social science, despite the workplace being an everyday nexus for social mixing, cohesion, contact, claims making, and resource exchange. It is all the more urgent to study as workplaces, in the last decades, have undergone profound reorganizations that could affect the magnitude and evolution of earnings segregation. Analyzing linked employer-employee panel administrative databases, the authors estimate the evolving isolation of higher earners from other employees in 12 countries: Canada, Czechia, Denmark, France, Germany, Hungary, Japan, the Netherlands, Norway, Spain, South Korea, and Sweden. They find in almost all countries a growing workplace isolation of top earners and dramatically declining exposure of top earners to bottom earners. The authors perform a first exploration of the main factors accounting for this trend: deindustrialization, workplace downsizing, restructuring (including layoffs, outsourcing, offshoring, and subcontracting), and digitalization contribute substantially to the increase in top earner segregation. These findings open up a future research agenda on the causes and consequences of top earner segregation.