The Structure of Organizational Earnings Inequality

Abstract

This article examines the organizational correlates of earnings inequality using data from the National Organizations Study. The authors conceptualize earnings inequality within organizations as comprising two distinct components: within- and between-occupations earnings dispersion. The authors test three sets of hypotheses about the determinants of organizational earnings inequality. These are related to (a) an organization's context, (b) the organization's structure, and (c) the composition of the organization's labor force. The authors find that larger and more differentiated organizations are associated with greater inequality, but only within managerial occupations. Organizations with firm internal labor markets have less inequality between occupations. And, gender heterogeneity enhances inequality between as well as within occupations.