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Finance and the rise in inequalities in France


  • Olivier Godechot

    () (PSE - Paris School of Economics, CMH - Centre Maurice Halbwachs - UNICAEN - Université de Caen Normandie - NU - Normandie Université - ENS Paris - École normale supérieure - Paris - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique, CREST - Centre de Recherche en Économie et Statistique - INSEE - ENSAE ParisTech - École Nationale de la Statistique et de l'Administration Économique)


Based on the DADS, a very detailed French database on wages, we show that wage inequalities started to increase in France in the mid-1990s. This phenomenon is limited to the top end of income distribution and concerns mainly the top 0.1%, whose share of total salaries increased from 1.2% to 2% between 1996 and 2007. This increase in inequality was accompanied by some changes in the social composition of this wage elite. These include a decline in employees in the provinces, in CEOs; and an increase in lower rank management like chief officers and other administrative managers, in sportspersons, and in Paris Region employees. A sector approach shows that finance (3% of private sector employees) is responsible for half of the rise in inequalities at the top end of wage distribution. We discuss the role of the size of financial activity in the tremendous increase in top financial wages.

Suggested Citation

  • Olivier Godechot, 2011. "Finance and the rise in inequalities in France," Working Papers halshs-00584881, HAL.
  • Handle: RePEc:hal:wpaper:halshs-00584881
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    References listed on IDEAS

    1. Thomas Philippon & Ariell Reshef, 2009. "Wages and Human Capital in the U.S. Financial Industry: 1909-2006," NBER Working Papers 14644, National Bureau of Economic Research, Inc.
    2. Xavier Gabaix & Augustin Landier, 2008. "Why has CEO Pay Increased So Much?," The Quarterly Journal of Economics, Oxford University Press, vol. 123(1), pages 49-100.
    3. James Crotty, 2009. "The Bonus-Driven “Rainmaker” Financial Firm: How These Firms Enrich Top Employees, Destroy Shareholder Value and Create Systemic Financial Instability," UMASS Amherst Economics Working Papers 2009-13, University of Massachusetts Amherst, Department of Economics.
    4. Lucian Bebchuk, 2005. "The Growth of Executive Pay," Oxford Review of Economic Policy, Oxford University Press, vol. 21(2), pages 283-303, Summer.
    5. Brian Bell & John Van Reenen, 2010. "Bankers' Pay and Extreme Wage Inequality in the UK," CEP Special Papers 21, Centre for Economic Performance, LSE.
    6. Amable, Bruno, 2003. "The Diversity of Modern Capitalism," OUP Catalogue, Oxford University Press, number 9780199261147.
    7. Wojciech Kopczuk & Emmanuel Saez & Jae Song, 2010. "Earnings Inequality and Mobility in the United States: Evidence from Social Security Data Since 1937," The Quarterly Journal of Economics, Oxford University Press, vol. 125(1), pages 91-128.
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    Cited by:

    1. Daniel Detzer, 2015. "Inequality and the Financial System— The Case of Germany," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 54(4), pages 585-608.
    2. Michel Forsé & Jean-Luc Parodi, 2011. "La perception des inégalités en France depuis dix ans," Sciences Po publications info:hdl:2441/eu4vqp9ompq, Sciences Po.
    3. Jean-François Carpantier & Christelle Sapata, 2013. "An Ex-Post View of Inequality of Opportunity in France and its Regions," Journal of Labor Research, Springer, vol. 34(3), pages 281-311, September.
    4. CARPANTIER, Jean-François & SAPATA, Christelle, 2012. "Unfair inequalities in France: A regional comparison," CORE Discussion Papers 2012038, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    5. Gusmano, Michael K. & Weisz, Daniel & Rodwin, Victor G. & Lang, Jonas & Qian, Meng & Bocquier, Aurelie & Moysan, Veronique & Verger, Pierre, 2014. "Disparities in access to health care in three French regions," Health Policy, Elsevier, vol. 114(1), pages 31-40.

    More about this item


    Inequalities; wages; finance; superstars; France; Inégalités; salaires;

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