Sorting in the U.S. Corporate Executive Labor Market

59 Pages Posted: 10 Oct 2014 Last revised: 21 Oct 2017

See all articles by Egor Matveyev

Egor Matveyev

Massachusetts Institute of Technology (MIT) - Sloan School of Management

Date Written: February 1, 2016

Abstract

This paper measures the degree of sorting by skill in the U.S. labor market for senior managers. I utilize both wage data and a comprehensive dataset that contains education information on 10,517 executives. I present evidence of a high degree of within-firm positive sorting: better managers are matched with better coworkers. Sorting significantly contributes to variation in productivity across firms and explains a large portion of observed differences in TFP. In addition, sorting explains 20% of variation in compensation. I consider several explanations and suggest that the findings are most easily explained by complementarities in production within executive teams.

Keywords: Managerial talent, complementarities in production, assortative matching, executive compensation, director compensation, structural estimation

JEL Classification: G32, M12, M52

Suggested Citation

Matveyev, Egor, Sorting in the U.S. Corporate Executive Labor Market (February 1, 2016). Available at SSRN: https://ssrn.com/abstract=2482732 or http://dx.doi.org/10.2139/ssrn.2482732

Egor Matveyev (Contact Author)

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

100 Main Street
E62-621
Cambridge, MA 02142
United States

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