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No. 687: The Wage Incentive to Management: A Comparison across European Economies

Marco Biagetti , Ministry of Economic Development, Rome
Leone Leonida , Queen Mary, University of London
Sergio Scicchitano , Ministry of Economic Development, Rome

January 1, 2012

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Abstract

We define the wage incentive to management as the wage premium the manager earns because of his/her supervising role. We adopt an approach based on what if questions and estimate the premium at different quantiles of the distribution of wages for 26 European economies. To ease comparisons we make use of the European Union Statistics on Income and Living Conditions inquiry released in 2009. The premium is found to be higher at the right tail of the distribution of wages, suggesting that the incentive to management differs across individuals at different quantiles of the distribution within each economy. Results also suggest that the premium differs across individuals located at the same quantiles of the distribution of different economies.

J.E.L classification codes: C14, J31, J41

Keywords:Distribution of wages, Incentives to management, Semiparametric methods

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