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Compensation in the Financial Sector: Are all Bankers Superstars?


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  • Célérier, C.
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    Based on a survey among French engineers, I find that employees in the financial sector are highly paid. I also find large pay differences within the sector and that a large share of compensation is variable. I consider three potential models accounting for these facts: a model of superstars (Rosen, 1981), a model of compensating wage differential (Lucas, 1977), and a model of moral hazard (Laffont and Martimort, 2002). I investigate and test the empirical implications of these models. I conclude that the model of superstars fits better the data than the models of moral hazard and compensating wage differential.

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    Bibliographic Info

    Paper provided by Banque de France in its series Working papers with number 294.

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    Length: 49 pages
    Date of creation: 2010
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    Handle: RePEc:bfr:banfra:294

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    Postal: Banque de France 31 Rue Croix des Petits Champs LABOLOG - 49-1404 75049 PARIS
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    Keywords: Finance; compensation ; wage distribution ; wage structure ; incentives; superstars;

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