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Wall Street and Main Street: What Contributes to the Rise in the Highest Incomes?

In: Corporate Governance

  • Steven N. Kaplan
  • Joshua Rauh

We study how much of the top end of the income distribution is represented by four sectors--non-financial-firm top executives (Main Street); investment bankers and hedge, private equity, and mutual fund investors (Wall Street); corporate lawyers; and athletes and celebrities. Wall Street individuals comprise a higher percentage of the top income brackets than nonfinancial executives of public companies. While top executives' representation in the top brackets has increased from 1994 to 2004, Wall Street's representation has likely increased even more. We discuss the implications of our findings for different explanations for the increased skewness at the highest income levels. The Author 2009. Published by Oxford University Press on behalf of The Society for Financial Studies. All rights reserved. For Permissions, please e-mail:, Oxford University Press.

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This chapter was published in:
  • Michael Weisbach, 2010. "Corporate Governance," NBER Books, National Bureau of Economic Research, Inc, number weis10-1, December.
  • This item is provided by National Bureau of Economic Research, Inc in its series NBER Chapters with number 12188.
    Handle: RePEc:nbr:nberch:12188
    Contact details of provider: Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
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    1. Andrew Metrick, 2010. "The Economics of Private Equity Funds," Review of Financial Studies, Society for Financial Studies, vol. 23(6), pages 2303-2341, June.
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