• bargaining
• power

The increase in both income and wealth inequality experienced by many advanced countries in recent decades have spurred the interests of scholars in investigating the dynamics underlying this phenomenon. Market-based and Institutional explanations have been put forward.
This work, starting from the Institutional perspective, aims to underline and verify the importance of bargaining power in the determination of income distribution and dispersion. In this sense, many contributions have focused on the empirical relevance of unbalanced power in the labour market especially between employers and workers, thus revealing frameworks departing from perfect competition. Instead, the present analysis focuses on the relevance of asymmetries of bargaining power within employees. Indeed, patterns of wage dispersion between firms' hierarchical layers suggest the presence of interesting dynamics underling this process. Evidences underline unbalanced mechanisms of value appropriation within firms' hierarchical layers. The presented framework reveals how inequality and different compensation growth between job qualifications can be accentuated by dynamics of power and unbalanced bargaining processes. This dynamic is likely to exacerbate inequality between workers, thus recreating a social class environment where classes of workers have different possibilities and life standards, based on an unfair different weighting in the society.