Technological change and the finance wage premium

  • This paper utilizes a comprehensive worker-firm panel for the Netherlands to quantifythe impact of ICT capital-skill complementarity on the finance wage premium after the Global Financial Crisis. We apply additive worker and firm fixed-effect models 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.

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Author:Ata Can BertayORCiDGND, José Carreño, Harry HuizingaGND, Burak UrasORCiDGND, Nathanael Vellekoop
Parent Title (English):SAFE working paper ; No. 361
Series (Serial Number):SAFE working paper series (361)
Place of publication:Frankfurt am Main
Document Type:Working Paper
Year of Completion:2022
Year of first Publication:2022
Publishing Institution:Universitätsbibliothek Johann Christian Senckenberg
Release Date:2022/11/08
Tag:finance wage premium; skill-biased technological change; worker-firm panels
Issue:October 1, 2022
Page Number:52
Institutes:Wirtschaftswissenschaften / Wirtschaftswissenschaften
Wissenschaftliche Zentren und koordinierte Programme / House of Finance (HoF)
Wissenschaftliche Zentren und koordinierte Programme / Center for Financial Studies (CFS)
Wissenschaftliche Zentren und koordinierte Programme / Sustainable Architecture for Finance in Europe (SAFE)
Dewey Decimal Classification:3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft
JEL-Classification:G Financial Economics / G2 Financial Institutions and Services / G20 General
J Labor and Demographic Economics / J2 Demand and Supply of Labor / J24 Human Capital; Skills; Occupational Choice; Labor Productivity
J Labor and Demographic Economics / J3 Wages, Compensation, and Labor Costs / J31 Wage Level and Structure; Wage Differentials
O Economic Development, Technological Change, and Growth / O3 Technological Change; Research and Development / O33 Technological Change: Choices and Consequences; Diffusion Processes
Licence (German):License LogoDeutsches Urheberrecht