The Role of Workers’ and Employers’ Bargaining Power in “Distributional Workplace Accounts”

What is DIWA?

"Distributional Workplace Accounts" (DIWA) integrate personal, workplace, and functional income distributions to measure the distribution of pretax factor income among:

Income classes (defined by individuals’ ranked income),
Production classes (defined by individuals’ workplace ownership, employment status, and firms’ characteristics)
Social groups (defined by individual’s gender, ethnicity, race, and education attainment).

DIWA's Motivation

DIWA include three moves in income inequality research-focus:

Move #1: From wages to total income
Move #2: From analyses at the individual or national-level, to analyses at the workplace level
Move #3: From individual income, to group income

Bargaining power is produced and reproduced, to a large extent, among groups holding similar positions and having similar resources.

What are DIWA's Expected Contributions?

DIWA makes it possible to generate consistent statistics of income distribution (i.e., income shares) based on observed income data for:
1. Income classes, defined by individual’s income level (e.g., the bottom 50%, the middle 40%, and the top 10%).
2. Production classes, defined by individuals’ workplace ownership (e.g., business owners, self-employed, wage and salary workers), employment status (e.g., manager, standard, gig), and firms’ characteristics (e.g., sector, firm's size).
3. Social groups, defined by individual’s gender, ethnicity, race, and education attainment.
DIWA makes it possible to conceptualize and measure:
1. Relative bargaining power of income classes, production classes and social groups as a relational position of a group and its resources relative to other groups.
2. The fabric of groups’ relative bargaining power, which reflects a constellation of interests that results in zero-sum and non-zero-sum class compromises
3. The relations between relative bargaining power and income distribution.

How Do We Construct DIWA?

To construct DIWA, we combine population, educational and business registers with individual tax records, linked employer-employee data, and imputed observations for the non-tax-filers.
We construct DIWA for three diverse political economy countries:
- Israel, 1987-2023, individual- and workplace-level data
- US, 1996-2023 (manufacturing sector), individual- and workplace-level data
- US, 1967-2023 (manufacturing sector), workplace-level data
- Denmark, 1996-2023, individual- and workplace-level data