The US Finance Wage Premium Before and After the Financial Crisis: A Decomposition Exercise

Stella Capuano; Tat-kei Lai; Hans-Jörg Schmerer

doi:10.1080/13504851.2014.914134

The US Finance Wage Premium Before and After the Financial Crisis: A Decomposition Exercise

Stella Capuano, Tat-kei Lai, Hans-Jörg Schmerer

Department of Economics

Institute for Employment Research (IAB)

Research output: Contribution to journal › Journal article › Research › peer-review

Abstract

Does the recent financial crisis change the wage structures of the US finance and nonfinance sectors? In this article, we study the wage gap between workers in these two sectors between 1990 and 2011. Using data from the Current Population Survey, we find that the finance wage premium increased over time and only dropped modestly during the crisis. Using the Oaxaca–Blinder method to decompose the wage gap into ‘explained’ and ‘unexplained’ parts, we also find that the wage gap was entirely driven by unexplained factors.

Original language	English
Journal	Applied Economics Letters
Volume	21
Issue number	16
Pages (from-to)	1144-1147
ISSN	1350-4851
DOIs	https://doi.org/10.1080/13504851.2014.914134
Publication status	Published - 2014

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title = "The US Finance Wage Premium Before and After the Financial Crisis: A Decomposition Exercise",

abstract = "Does the recent financial crisis change the wage structures of the US finance and nonfinance sectors? In this article, we study the wage gap between workers in these two sectors between 1990 and 2011. Using data from the Current Population Survey, we find that the finance wage premium increased over time and only dropped modestly during the crisis. Using the Oaxaca–Blinder method to decompose the wage gap into {\textquoteleft}explained{\textquoteright} and {\textquoteleft}unexplained{\textquoteright} parts, we also find that the wage gap was entirely driven by unexplained factors.",

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AB - Does the recent financial crisis change the wage structures of the US finance and nonfinance sectors? In this article, we study the wage gap between workers in these two sectors between 1990 and 2011. Using data from the Current Population Survey, we find that the finance wage premium increased over time and only dropped modestly during the crisis. Using the Oaxaca–Blinder method to decompose the wage gap into ‘explained’ and ‘unexplained’ parts, we also find that the wage gap was entirely driven by unexplained factors.

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