Returns to Talent and the Finance Wage Premium

50 Pages Posted: 10 Feb 2014 Last revised: 13 Nov 2018

See all articles by Claire Celerier

Claire Celerier

University of Toronto - Rotman School of Management

Boris Vallee

Harvard Business School - Finance Unit

Date Written: October 3, 2018

Abstract

To study the role of talent in finance workers' pay, we exploit a special feature of the French higher education system. Wage returns to talent have been significantly higher and have risen faster since the 1980s in finance than in other sectors. Both wage returns to project size and the elasticity of project size to talent are also higher in this industry. Last, the share of performance-pay varies more with respect to talent in finance. These findings are supportive of finance wages reflecting the competitive assignment of talent in an industry that exhibits a high complementarity between talent and scale.

Keywords: Finance, Compensation, Talent, Wage Distribution, Wage Structure, Superstars

JEL Classification: G2, G24, J3, J31, M5

Suggested Citation

Celerier, Claire and Vallee, Boris, Returns to Talent and the Finance Wage Premium (October 3, 2018). Available at SSRN: https://ssrn.com/abstract=2393110 or http://dx.doi.org/10.2139/ssrn.2393110

Claire Celerier (Contact Author)

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada

Boris Vallee

Harvard Business School - Finance Unit ( email )

Boston, MA 02163
United States

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