This chapter considers two theories to explain the earnings dispersion in the different countries studied: shifting pay norms and pyramidal/superstar theories. It argues that the fanning out of the upper part of the earnings distribution in some, but not all, countries could be explained by a shift to a less redistributive pay norm. However, this argument has hardly been recognized in the literature. The superstar model has received more attention, but this attention has concentrated exclusively on the recent rise in top earnings.
Keywords: earnings distribution, earnings dispersion, pay norms, superstar model,