Abstract
We estimate the CEO earnings premium using Danish twin data. Ordinary least squares indicate CEOs earn 59.5% more than comparable non-CEOs. Controlling for twin-pair and firm fixed effects, which capture shared family, genetic, and workplace factors, reduces the premium substantially to 15.9%. A series of sensitivity analyses — varying income definitions, sample restrictions, firm-size interactions, and environmental controls — confirm that this reduced premium remains robust. These results suggest that a significant portion of the CEO earnings gap is explained by unobserved background factors rather than by the causal effect of CEO status itself.
| Original language | English |
|---|---|
| Article number | 112562 |
| Journal | Economics Letters |
| Volume | 256 |
| Number of pages | 5 |
| ISSN | 0165-1765 |
| DOIs | |
| Publication status | Published - Oct 2025 |
Keywords
- CEO earnings
- Twins data
- Panel data econometrics
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