Finance Sector Wage Growth and the Role of Human Capital

22 Pages Posted: 27 Jun 2017

See all articles by Joanne Lindley

Joanne Lindley

University of Nottingham - School of Economics

Steven McIntosh

London School of Economics & Political Science (LSE)

Date Written: August 2017

Abstract

We reveal the pervasiveness of the finance sector pay premium, across all OECD countries, as well as all sub‐sectors and occupations within the UK financial sector. Moreover, the UK premium has continued to rise despite the financial crisis. We show that earnings increase faster with value added in certain sub‐sectors of finance, compared to the general economy, providing evidence of profit‐sharing in these sub‐sectors. Other possible explanations, such as workers with higher qualifications or better cognitive skills, or technological change and differing job characteristics, can explain some of the finance sector pay premium, but are not sufficient on their own.

Suggested Citation

Lindley, Joanne and McIntosh, Steven, Finance Sector Wage Growth and the Role of Human Capital (August 2017). Oxford Bulletin of Economics and Statistics, Vol. 79, Issue 4, pp. 570-591, 2017, Available at SSRN: https://ssrn.com/abstract=2992885 or http://dx.doi.org/10.1111/obes.12155

Joanne Lindley (Contact Author)

University of Nottingham - School of Economics ( email )

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HOME PAGE: http://www.nottingham.ac.uk/economics/staff/details/joanne_lindley.htm

Steven McIntosh

London School of Economics & Political Science (LSE) ( email )

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London WC2A 2AE
+44 (0)171 955 7442 (Phone)

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