Technological Change and the Finance Wagepremium

51 Pages Posted: 8 May 2023

See all articles by Ata Can Bertay

Ata Can Bertay

Sabanci University

JOSE CARRENO

Tilburg University

Harry Huizinga

Tilburg University - Center for Economic Research (CentER); Centre for Economic Policy Research (CEPR)

Burak Uras

Tilburg University

Nate Vellekoop

Williams College - Department of Economics; University of Toronto

Abstract

This paper utilizes a comprehensive worker-firm panel for the Netherlands to quantify the impact of ICT capital-skill complementarity on the finance wage premium after the Global Financial Crisis. We apply additive worker and firm fixed-effectmodels to account for unobserved worker- and firm-heterogeneity and show that firm fixed-effects correct for a downward bias in the estimated finance wage premium. Our results indicate a sizable finance wage premium for both fixed- and full-hourly wages. The complementarity between ICT capital spending and the share of high skill workers at the firm-level reduces the full-wage premium considerably and the fixed-wage premium almost entirely.

Keywords: finance wage premium, worker-firm panels, skill-biased technological change

Suggested Citation

Bertay, Ata Can and CARRENO, JOSE and Huizinga, Harry and Uras, Burak and Vellekoop, Nathanael, Technological Change and the Finance Wagepremium. Available at SSRN: https://ssrn.com/abstract=4441403 or http://dx.doi.org/10.2139/ssrn.4441403

Ata Can Bertay

Sabanci University ( email )

School of Management
Orhanli Tuzla
İstanbul, 34956
Turkey

JOSE CARRENO

Tilburg University ( email )

Harry Huizinga (Contact Author)

Tilburg University - Center for Economic Research (CentER) ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands
+31 13 466 2623 (Phone)
+31 13 466 3042 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Burak Uras

Tilburg University ( email )

P.O. Box 90153
Tilburg, DC 5000 LE
Netherlands

Nathanael Vellekoop

Williams College - Department of Economics ( email )

Schapiro Hall
24 Hopkins Drive
Williamstown, MA 01267
United States

University of Toronto ( email )

Max Gluskin House
150 St George st
Toronto, Ontario M5S 3G7
Canada

HOME PAGE: http://www.nvellekoop.nl

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