@techreport{53337332931243ad805998533ba7db3a,
title = "A Simple Theory of Pareto Earnings",
abstract = "I introduce a simple model which endogenously generates a Pareto distribution in top earnings, consistent with empirics. Workers inhabit different niches, and the earnings of a worker is determined by the niche-specifc supply of labor and a constant-elasticity labor-demand curve. The highest paid workers are the ones that inhabit a niche with few other workers. A Pareto tail in earnings emerges as long as the distribution of workers over niches satisfies a regularity condition from extreme-value theory, satisfied by virtually all continuous distributions in economics.",
author = "Karl Harmenberg",
year = "2020",
language = "English",
series = "Working Paper / Department of Economics. Copenhagen Business School",
publisher = "Copenhagen Business School [wp]",
number = "21-2020",
address = "Denmark",
type = "WorkingPaper",
institution = "Copenhagen Business School [wp]",
}