Purchase - $38.00

Reaching for the Stars: Who Pays for Talent in Innovative Industries?

25 Pages Posted: 27 May 2009  

Fredrik Andersson

Office of the Comptroller of the Currency (OCC)

Matthew Freedman

University of California, Irvine - Department of Economics

John Haltiwanger

University of Maryland - Department of Economics; National Bureau of Economic Research (NBER); Institute for the Study of Labor (IZA)

Julia Lane

Wagner Graduate School of Public Service; Institute for the Study of Labor (IZA)

Kathryn L. Shaw

Stanford Graduate School of Business; National Bureau of Economic Research (NBER)

Multiple version iconThere are 3 versions of this paper

Date Written: 0000

Abstract

Innovative firms need to hire and motivate highly talented workers. This article connects the potential returns to innovation to the structure of compensation for skilled employees. We show that the software firms that operate in software sectors with high potential upside gains to innovation pay more to ‘star’ workers than do other firms that operate in stable markets. Firms operating in product domains with highly skewed positive returns pay employees more in up-front starting salaries and offer higher compensation growth. The large estimated effects on earnings are robust to the inclusion of a wide range of controls for worker and firm characteristics.

Suggested Citation

Andersson, Fredrik and Freedman, Matthew and Haltiwanger, John and Lane, Julia and Shaw, Kathryn L., Reaching for the Stars: Who Pays for Talent in Innovative Industries? (0000). The Economic Journal, Vol. 119, Issue 538, pp. F308-F332, June 2009. Available at SSRN: https://ssrn.com/abstract=1410309 or http://dx.doi.org/10.1111/j.1468-0297.2009.02277.x

Per Fredrik Daniel Andersson

Office of the Comptroller of the Currency (OCC) ( email )

400 7th St. SW
Washington, DC 20219-0001
United States
202-649-5528 (Phone)
571-465-3246 (Fax)

Matthew Freedman

University of California, Irvine - Department of Economics ( email )

3151 Social Science Plaza
Irvine, CA 92697-5100
United States

John C. Haltiwanger

University of Maryland - Department of Economics ( email )

College Park, MD 20742
United States
301-405-3504 (Phone)
301-405-3542 (Fax)

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Institute for the Study of Labor (IZA) ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Julia Lane

Wagner Graduate School of Public Service ( email )

The Puck Building
295 Lafayette Street, Second Floor
New York, NY 10012
United States

Institute for the Study of Labor (IZA) ( email )

P.O. Box 7240
Bonn, D-53072
Germany

HOME PAGE: http://www.iza.org

Kathryn L. Shaw

Stanford Graduate School of Business ( email )

655 Knight Way
Stanford, CA 94305-5015
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Paper statistics

Downloads
1
Abstract Views
493