|This centre is a member of The LSE Research Laboratory [RLAB]: CASE | CEE | CEP | FMG | SERC | STICERD||Cookies?|
Paper No' CEPOP35: | Full paper
Save Reference as: BibTeX File | EndNote Import File
Keywords: wage inequality; financial services, bonuses
Is hard copy/paper copy available? YES - Paper Copy Still In Print.
This Paper is published under the following series: CEP Occasional Papers
Share: Google Bookmarks | Facebook | Twitter
Abstract:The pay of financial sector workers (“bankers”) is a focus of public concern especially since the onset of the financial crisis. We document the remarkable rise in the share of aggregate pay going to those at the very top of the distribution over the last decade in the UK and highlight the role of the financial sector. Rising bonuses paid to bankers accounted for around two-thirds of the increase in the national wage bill (“earnings pie”) taken by the top one percent of workers since 1999. Surprisingly, even after the crisis bankers took at least as large a share of the earnings pie in 2011 as they did at the peak of the boom in 2007 and saw no worsening in their employment outcomes relative to other similar workers. Having described the scale of bankers’ pay, we discuss the policy responses that have been proposed to address the issue such as transparency, numerical bonus targets, bonus clawbacks and taxation.
This paper has been published as:
The Economic Journal V124, F1-F21 (February 2014)
Copyright © CEP & LSE 2003 - 2015 | LSE, Houghton Street, London WC2A 2AE | Tel: +44(0)20 7955 7673 | Email: firstname.lastname@example.org | Site updated 26 January 2015