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Technological Change and the Finance Wage Premium

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  • Bertay, Ata

    (Tilburg University, Center For Economic Research)

  • Carreño Bustos, José

    (Tilburg University, Center For Economic Research)

  • Huizinga, Harry

    (Tilburg University, Center For Economic Research)

  • Uras, Burak

    (Tilburg University, Center For Economic Research)

  • Vellekoop, N.

    (Tilburg University, Center For Economic Research)

Abstract

This paper utilizes a comprehensive worker-firm panel for the Netherlands to quantify the 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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  • Bertay, Ata & Carreño Bustos, José & Huizinga, Harry & Uras, Burak & Vellekoop, N., 2022. "Technological Change and the Finance Wage Premium," Discussion Paper 2022-002, Tilburg University, Center for Economic Research.
    • Handle: RePEc:tiu:tiucen:e3543110-e75d-4749-b4ee-2fbd67a124d9
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    1. Taskin, Ahmet Ali & Yaman, Firat, 2023. "The effect of branching deregulation on finance wage premium," FAU Discussion Papers in Economics 08/2023, Friedrich-Alexander University Erlangen-Nuremberg, Institute for Economics.

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    More about this item

    Keywords

    finance wage premium; worker-firm panels; skill-biased technological change;
    All these keywords.

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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