MAN Seminar: “The Finance Wage Premium: The Dutch Case”, Ata Can Bertay, 1:40PM 20 Kasım (EN)

Date: 20 November 2020, Friday
Time: 13:40-14:40

“The Finance Wage Premium: The Dutch Case”
by Ata Can Bertay

Abstract: We use a massive matched employer-employee database to identify the financial wage premium in the Netherlands. Using this data, we start by documenting the
evolution of the finance industry over the period 2006-2018. Perhaps surprisingly, we
show that the excessive wage in the finance industry steadily increased over the sample
period despite the Global Financial Crisis and the European Debt Crisis. Consistent
with the substitution of capital for unskilled labor to exploit technical change, we
also observe that the supply of high-skilled workers and the capital associated with
information and computer technologies (ICT) increased rapidly over the period 2006-
2018. Guided by these facts, we study if the finance wage premium is explained by
ICT capital-skill complementary at industry level when controlling by the observed
and unobserved worker and firm characteristics. Contrary to a long literature documenting
an excessive and unexplained wage premium in the finance industry, we
find that the finance wage premium is -3%.