The role of headhunters in wage inequality: It's all about matching

Gorn, Alexey ORCID: 0000-0001-6297-2428 (2020) The role of headhunters in wage inequality: It's all about matching. Review of Economic Dynamics, 40. pp. 309-346.

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Official URL: http://dx.doi.org/10.1016/j.red.2020.10.006

Abstract

This study relates the increase in the U.S. top wages to the increasing prominence of headhunters. Headhunters improve the matching between firms and employees via two channels: screening of candidates and passive on-the-job search. I incorporate headhunters in the labor market framework of random search with two-sided heterogeneity. The calibrated model shows that headhunters can account for 32% of the increase in the top 10% wage share in the U.S. from 1970 to 2010, with 19% due to improvements in matching between workers and firms. I provide supporting micro evidence for CEO compensation, as well as cross-country evidence on headhunter hires/fees and top income growth.

Item Type:	Article
Uncontrolled Keywords:	Wage distribution, Top incomes, Sorting, On-the-job search, Headhunters
Depositing User:	Symplectic Admin
Date Deposited:	15 Oct 2020 12:29
Last Modified:	18 Jan 2023 23:28
DOI:	10.1016/j.red.2020.10.006
Related URLs:	Author Publisher
URI:	https://livrepository.liverpool.ac.uk/id/eprint/3104275