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Changes in Managerial Pay Structures 1986-1992 and Rising Returns to Skill

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  • O'shaughnessy, Kevin C.
  • Levine, David I.
  • Cappelli, Peter

Abstract

We examine the relationship between wages and skill requirements in a sample of over 50,000 managers in 39 companies between 1986 and 1992. The data include an unusually good measure of job requirements and skills that can proxy for human capital. We find that wage inequality increased both within and between firms from 1986 and 1992. Higher returns to our measure of skill accounts for most of the increasing inequality within firms. At the same time, our measure of skill does not explain much of the cross-sectional variance in average wages between employers, and changes in returns to skill do not explain any of the time series increase in between-firm variance over time. Finally, we find only weak evidence of any declines in the rigidity of internal wage structures of large employers.

Suggested Citation

  • O'shaughnessy, Kevin C. & Levine, David I. & Cappelli, Peter, 1998. "Changes in Managerial Pay Structures 1986-1992 and Rising Returns to Skill," Institute for Research on Labor and Employment, Working Paper Series qt3cm3820b, Institute of Industrial Relations, UC Berkeley.
    • Handle: RePEc:cdl:indrel:qt3cm3820b
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    Cited by:

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    2. Schüssler, Reinhard & Seidel, Christian, 2010. "Gale Shapley auf dem Arbeitsmarkt," EconStor Preprints 55829, ZBW - Leibniz Information Centre for Economics.
    3. Mañé Vernet, Ferran & Miravet, Daniel, 2010. "An investigation on the pay-off to generic competences for core employees in Catalan manufacturing firms," Working Papers 2072/179595, Universitat Rovira i Virgili, Department of Economics.
    4. Hans Heijke & Christoph Meng & Ger Ramaekers, 2003. "An investigation into the role of human capital competences and their pay‐off," International Journal of Manpower, Emerald Group Publishing Limited, vol. 24(7), pages 750-773, November.
    5. Kuenn, A.C. & Meng, C.M. & Peters, Z. & Verhagen, A.M.C., 2013. "Competencies: requirements and acquisition," ROA Report 006, Maastricht University, Research Centre for Education and the Labour Market (ROA).

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