Superstar (and Entrepreneurial) Engineers in Finance Jobs

56 Pages Posted: 13 Mar 2018 Last revised: 23 Jul 2018

Nandini Gupta

Indiana University - Kelley School of Business - Department of Finance

Isaac Hacamo

Indiana University - Kelley School of Business - Department of Finance

Date Written: March 8, 2018

Abstract

Does rapid wage growth in the financial sector in recent decades attract scarce talent to finance, thereby affecting talented workers’ long-term career paths? To study this question we focus on the careers of elite engineers, whose skills are in demand across the economy and who have the potential to become transformative entrepreneurs. Using plausibly exogenous variation in local financial sector growth, we compare U.S. engineering graduates from 12 top schools in the same graduating class and major, and show that engineers from higher ranked schools, and those with graduation honors, are more likely to switch from other sectors to finance. We find that financial sector growth attracts highly talented engineers into financial sector occupations that do not fully use their skills, which leads these engineers to engage in less innovative entrepreneurship in the long-run, compared to their classmates who remain in engineering. Our results are robust to alternative specifications, including a measure of geographic location based on engineers’ hometowns.

Keywords: Finance and labor; Talent allocation; Superstars; Human capital; Careers in finance; Financial sector growth; Entrepreneurship; Innovation

JEL Classification: G2, G20, J2, J3, J31, M52, N2

Suggested Citation

Gupta, Nandini and Hacamo, Isaac, Superstar (and Entrepreneurial) Engineers in Finance Jobs (March 8, 2018). Kelley School of Business Research Paper No. 18-18. Available at SSRN: https://ssrn.com/abstract=3136751 or http://dx.doi.org/10.2139/ssrn.3136751

Nandini Gupta

Indiana University - Kelley School of Business - Department of Finance ( email )

1309 E. 10th St.
Bloomington, IN 47405
United States
812-855-3416 (Phone)
812-855-5875 (Fax)

Isaac Hacamo (Contact Author)

Indiana University - Kelley School of Business - Department of Finance ( email )

1309 E. 10th St.
Bloomington, IN 47405
United States
812-855-7842 (Phone)

HOME PAGE: http://hacamo.weebly.com/

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