Lindley, J. and McIntosh, M. (2014) Finance sector wage growth and the role of human capital. Working Paper. SERPS (201400). Department of Economics, University of Sheffield ISSN 1749-8368
Abstract
Given the UK finance sector is one of the largest in the world, it provides the perfect setting for a study into the nature of the finance sector wage premium. We reveal the pervasiveness of this premium, across all sub-sectors of finance, and across all occupations within finance, and with the very highest rewards going to 40-49 year old men working in London. Moreover, the UK premium has continued to rise despite the recent financial crisis. Consequently, this study uses rich data from the UK to investigate potential explanations. We find that the financial sector is more skill intensive but also that financial sector workers have higher childhood test scores vis-à-vis non-finance workers. So we investigate to what extent these higher qualifications and higher cognitive skills can explain the financial pay differential. We then go on to consider whether the financial premium is a consequence of differences in job characteristics and thus whether technological change can explain the growth in the premium. While each of these factors has some role to play, we find that none can fully explain the wage premium found in the financial sector, which we find to be pervasive across 17 OECD countries, including the US. We therefore attribute to this to rent-sharing.
Metadata
Item Type: | Monograph |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | The Sheffield Economic Research Paper Series (SERPS) offers a forum for the research output of the Department of Economics, University of Sheffield. Papers are reviewed for quality and presentation by two internal referees and a departmental editor. However, the contents and opinions expressed remain the responsibility of the author(s). Comments are welcomed and should be addressed to the individual author(s). |
Dates: |
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Institution: | The University of Sheffield |
Academic Units: | The University of Sheffield > Faculty of Social Sciences (Sheffield) > Department of Economics (Sheffield) > Sheffield Economics Research Papers Series |
Depositing User: | Miss Anthea Tucker |
Date Deposited: | 14 Mar 2014 11:45 |
Last Modified: | 25 Oct 2016 07:17 |
Published Version: | http://www.sheffield.ac.uk/economics/research/serp... |
Status: | Published |
Publisher: | Department of Economics, University of Sheffield |
Series Name: | SERPS |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:78153 |