Abstract

We study the allocation and compensation of human capital in the …nance industry in a set of developed economies in 19702005. Finance relative skill intensity and skilled wages gener-ally increase but not in all countries, and to varying degrees. These changes account for 36% of the average increase in overall skill premia in our sample. Financial deregulation, … nancial globalization and bank concentration are the most important factors driving these patterns. Di¤erential investment in information and communication technology does not have causal ex-planatory power. High …nance wages attract skilled international immigration to …nance, raising concerns for "brain drain". JEL classi…cations: G2, J2, J3.