Employer Dominance and Worker Earnings in Finance

Wenting Ma

Working Papers from U.S. Census Bureau, Center for Economic Studies

Abstract: Large firms in the U.S. financial system achieve substantial economic gains. Their dominance sets them apart while also raising concerns about the suppression of worker earnings. Utilizing administrative data, this study reveals that the largest financial firms pay workers an average of 30.2% more than their smallest counterparts, significantly exceeding the 7.9% disparity in nonfinance sectors. This positive size-earnings relationship is consistently more pronounced in finance, even during the 2008 crisis or compared to the hightech sector. Evidence suggests that large financial firms� excessive gains, coupled with their workers� sought-after skills, explain this distinct relationship.

JEL-codes: G20 J31 J42 L11 L12 L13 (search for similar items in EconPapers)
Date: 2024-08
New Economics Papers: this item is included in nep-cfn, nep-fdg and nep-lma
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https://www2.census.gov/library/working-papers/2024/adrm/ces/CES-WP-24-41.pdf First version, 2024 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:cen:wpaper:24-41

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