The great separation Top earners’ segregation at work in high income countries

Olivier Godechot


Utilizing linked employer-employee panel administrative databases, we study the evolving isolation of higher earners from other employees in eleven countries: Canada, Czechia, Denmark, France, Germany, Hungary, Japan, Norway, Spain, South Korea and Sweden. We find in almost all countries a growing isolation of top earners at work and declining exposure of the top to the bottom earners and vice versa. We compare these trends to isolation based on occupational class, education, age, gender, nativity and find that the growth in top earner isolation is much more dramatic and general across countries. We find that residential segregation is also growing, although slower than segregation at work, with top earners increasingly living in different municipalities. While work and residential segregation are correlated, we estimate models that suggest that the primary causal effect is from work to residence segregation.

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