Computing Capital Stocks in the German Social Security Records and Quantifying Their Role for Wage Inequality

Abstract

"We develop a method to impute capital stocks from investments for a sub-sample of firms in the German social security records and implement a machine-learning algorithm to predict capital stocks for the universe of firms. These capital stocks explain 40% of the variation in capital stocks of the Bureau van Dijk data. We make our data available for other researchers. We find that these capital stocks explain a sizeable fraction of wage inequality by extending the variance decomposition of Card et al. (2013), suggesting that rising firm heterogeneity in capital intensity may further amplify wage inequality." (Author's abstract, IAB-Doku) ((en))

Cite article

Janser, M., Lehmer, F. & Zierahn-Weilage, U. (2024): Computing Capital Stocks in the German Social Security Records and Quantifying Their Role for Wage Inequality. In: CESIfo Economic Studies, p. 1-25. DOI:10.1093/cesifo/ifae021