Wages and Human Capital in Finance: International Evidence, 1970-2005

59 Pages Posted: 11 Feb 2016

See all articles by Hamid Boustanifar

Hamid Boustanifar

EDHEC Business School; BI Norwegian Business School

Everett Grant

Federal Reserve Banks - Federal Reserve Bank of Dallas

Ariell Reshef

Paris School of Economics (PSE); CNRS; Université Paris I Panthéon-Sorbonne - CES/CNRS; Centre d'Etudes Prospectives et d'Info. Internationales (CEPII)

Multiple version iconThere are 2 versions of this paper

Date Written: 2016-02-01

Abstract

We study the allocation and compensation of human capital in the finance industry in a set of developed economies in 1970-2005. Finance relative skill intensity and skilled wages generally increase but not in all countries, and to varying degrees. Skilled wages in finance account for 36% of increases in overall skill premia, although finance only accounts for 5.4% of skilled private sector employment, on average. Financial deregulation, financial globalization and bank concentration are the most important factors driving wages in finance. Differential investment in information and communication technology does not have causal explanatory power. High finance wages attract skilled international immigration to finance, raising concerns for "brain drain".

JEL Classification: G2, J2, J3

Suggested Citation

Boustanifar, Hamid and Grant, Everett and Reshef, Ariell, Wages and Human Capital in Finance: International Evidence, 1970-2005 (2016-02-01). Globalization and Monetary Policy Institute Working Paper No. 266, Available at SSRN: https://ssrn.com/abstract=2731091 or http://dx.doi.org/10.24149/gwp266

Hamid Boustanifar (Contact Author)

EDHEC Business School ( email )

393 Promenade des Anglais – BP 3116
Nice, 06202
France

BI Norwegian Business School ( email )

Oslo
Norway

Everett Grant

Federal Reserve Banks - Federal Reserve Bank of Dallas ( email )

2200 North Pearl Street
PO Box 655906
Dallas, TX 75265-5906
United States

Ariell Reshef

Paris School of Economics (PSE) ( email )

48 Boulevard Jourdan
Paris, 75014 75014
France

CNRS ( email )

France

Université Paris I Panthéon-Sorbonne - CES/CNRS ( email )

106 bv de l'Hôpital
Paris, 75013
France

Centre d'Etudes Prospectives et d'Info. Internationales (CEPII) ( email )

9 rue Georges Pitard
Paris Cedex 15, F-75015
France

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