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SUMMARY:Firm Size Inequality\, Inter-Firm Compensation Inequality and Nati
 onal Income Accounting When Firms Insure Workers
DTSTART:20160617T103000
DTEND:20160617T120000
DTSTAMP:20260920T113553Z
UID:8a7570bd80d0ffc9a39779eb865924374e1d1bb51937f289c62d31c9
CATEGORIES:Conferences - Seminars
DESCRIPTION:Hanno LUSTIG (Stanford University)\nIn the universe of publicl
 y traded U.S. firms\, we find that the average firm's capital share has de
 clined over the last three decades\, while the aggregate capital share has
  increased substantially over the same period. Our decomposition attribute
 s this increase in the aggregate capital share to the increase in firm siz
 e inequality\, resulting from increased firm-level risk\, which was not of
 fset by a commensurate increase in inter-firm compensation inequality. We 
 use a model in which firms insure managers against firm-specific shocks as
  a laboratory for analyzing the impact of firm-level risk on the stationar
 y distribution of rents. In our model\, an increase in firm-level risk alw
 ays increases the aggregate capital share in the economy\, but may lower t
 he average firm's capital share. Because of selection\, the aggregate capi
 tal share reported in national income accounts produces a biased estimate 
 of ex ante profitability of firms which determines compensation. Managers 
 effectively choose to pay a larger insurance premium to the owners of capi
 tal.
LOCATION:UNIL\, Extranef\, room 126 https://planete.unil.ch/plan/?local=EX
 T-126
STATUS:CONFIRMED
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