Changes in Managerial Pay Structures 1986-1992 and Rising Returns to Skill
UC Berkeley Working Paper No. 67
40 Pages Posted: 1 Sep 1998
Date Written: April 1998
We analyze a database with information on wages and skills across firms in a sample of over 50,000 managers between 1986 and 1992. Our measure of skills and responsibility is an unusually good measure of human capital. We find that wage inequality increased both within and between firms between 1986 and 1992. Higher returns to our measure of skill accounts for most of the increasing inequality within firms. At the same time, our measure of skill does not explain much of the differences in average wages between employers, and changes in returns to skill do not explain any of the increase in between-firm variation over time.
JEL Classification: J31, J33
Suggested Citation: Suggested Citation