TY  - JOUR
AU  - Philippon,Thomas
AU  - Reshef,Ariell
TI  - Wages and Human Capital in the U.S. Financial Industry: 1909-2006
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 14644
PY  - 2009
Y2  - January 2009
UR  - http://www.nber.org/papers/w14644
L1  - http://www.nber.org/papers/w14644.pdf
N1  - Author contact info:
Thomas Philippon
New York University
Stern School of Business
44 West 4th Street, Suite 9-190
New York, NY  10012-1126
Tel: 212/998-0490
Fax: 212/995-4233
E-Mail: tphilipp@stern.nyu.edu

Ariell Reshef
University of Virginia
Department of Economics
P.O. Box 400182
Charlottesville, VA 22904-4182
Tel: 434-243-4977
Fax: 434-982-2904 
E-Mail: ariellr@virginia.edu
AB  - We use detailed information about wages, education and occupations to shed light on the evolution of the U.S. financial sector over the past century. We uncover a set of new, interrelated stylized facts: financial jobs were relatively skill intensive, complex, and highly paid until the 1930s and after the 1980s, but not in the interim period. We investigate the determinants of this evolution and find that financial deregulation and corporate activities linked to IPOs and credit risk increase the demand for skills in financial jobs. Computers and information technology play a more limited role. Our analysis also shows that wages in finance were excessively high around 1930 and from the mid 1990s until 2006. For the recent period we estimate that rents accounted for 30% to 50% of the wage differential between the financial sector and the rest of the private sector.
ER  -