Authors: Marta Fana, Luca Giangregorio, and Matteo Targa
Institution: Stone Center Working Paper Series no. 133
Date: October 2026
Abstract:
We study how firm-level productivity gains are shared across the occupational hierarchy. Using Portuguese matched employer-employee data linked to firm balance sheets (2004–2019), we develop an algorithm that identifies permanent shocks to firm value added and estimate occupation-specific rent-sharing elasticities in an event-study design. Pass-through declines steeply along the job ladder: the elasticity of pay premia to value added per worker is about 0.20 for managers and supervisors, 0.11 for qualified workers, and 0.06 for low-qualified workers. This gap has widened over time, increasing within-firm inequality, as pass-through to low-qualified workers has halved. This decline is consistent with de-unionization, while we show that minimum wage increases do not crowd out rent sharing at the bottom.
