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Sectoral differences in managers’ compensation: insights from a matching model

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Listed:
  • Emanuela Ciapanna

    (Bank of Italy)

  • Marco Taboga

    (Bank of Italy)

  • Eliana Viviano

    (Bank of Italy)

Abstract

We propose a structural model of two-sided matching and a semi-parametric procedure for its estimation that allow to analyze determinants of managers’ compensation such as firm’s and manager’s quality, production technology, bargaining power and inter-temporal preferences. We use the estimated model to study the stylized fact that managers in the financial sector receive higher compensation than their peers in other sectors. Our results suggest that a predominant portion of this wage gap is explained by differences in production technology, while differences in bargaining power, preferences and quality have a minor impact and are seldom statistically significant.

Suggested Citation

  • Emanuela Ciapanna & Marco Taboga & Eliana Viviano, 2015. "Sectoral differences in managers’ compensation: insights from a matching model," Temi di discussione (Economic working papers) 1000, Bank of Italy, Economic Research and International Relations Area.
    • Handle: RePEc:bdi:wptemi:td_1000_15
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    References listed on IDEAS

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    More about this item

    Keywords

    managers’ compensation; job matching;

    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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