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Changes in Managerial Pay Structures 1986-1992 and Rising Returns to Skill

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  • K.C. O'Shaughnessy
  • David I. Levine
  • Peter Cappelli

Abstract

We examine the relationship between wages and skill requirements in a sample of over 50,000 managers in 39 companies between 1986 and 1992. The data include an unusually good measure of job requirements and skills that can proxy for human capital. We find that wage inequality increased both within and between firms from 1986 and 1992. Higher returns to our measure of skill accounts for most of the increasing inequality within firms. At the same time, our measure of skill does not explain much of the cross-sectional variance in average wages between employers, and changes in returns to skill do not explain any of the time series increase in between-firm variance over time. Finally, we find only weak evidence of any declines in the rigidity of internal wage structures of large employers.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 7730.

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Date of creation: Jun 2000
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Publication status: published as O'Shaughnessy, K. C., David I. Levine and Peter Cappelli. "Changes In Managerial Pay Structures 1986-1992 And Rising Returns To Skill," Oxford Economic Papers, 2001, v53(3,Jul), 482-507.
Handle: RePEc:nbr:nberwo:7730

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  1. Blackburn, McKinley L & Neumark, David, 1993. "Omitted-Ability Bias and the Increase in the Return to Schooling," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 11(3), pages 521-44, July.
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  18. repec:fth:prinin:377 is not listed on IDEAS
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