New data on income inequality and finance

They confirm the central role of finance and in a piece I am writing for another outlet, I summarized some of the results as follows:

…for 2004, nonfinancial executives of publicly traded companies account for less than six percent of the top 0.01% income bracket.  In that same year, the top twenty-five hedge fund managers combined appear to have earned more than all of the CEOs from the entire S&P 500.  The number of Wall Street investors earning over $100 million a year was nine times higher than the public company executives earning that amount.

That is based on material from the Kaplan and Rauh paper in The Review of Financial Studies, 2010 (the final version is gated for many of you).  I had blogged an earlier version of this paper (which was itself excellent), but the final revision has additional numbers of interest, plus a much richer discussion.

On-line "pre-publication" is wonderful, but let's not neglect the improvements in the subsequent drafts brought in part by…on-line pre-publication.


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