It’s the Market: The Broad-Based Rise in the

Return to Top Talent

By Steven N. Kaplan and Joshua RauhPublished in Journal of Economic Perspectives (Summer 2013)

Volume 27(3) pp. 35–56

James J. HeckmanUniversity of Chicago

AEA Continuing Education ProgramASSA Course: Microeconomics of Life Course Inequality

San Francisco, CA, January 5–7, 2016

Kaplan and Rauh It’s the Market

Figure 1: Average & Median Total Pay (realized) of S&P 500 CEOs from1993 to 2011 (in millions of 2010 $)

Source: ExecuComp, Steven Kaplan

Kaplan and Rauh It’s the Market

Figure 2: Average Pay (Estimated and Realized) S&P 500 CEOs Relativeto Average AGI of Top 0.1% of Taxpayers from 1993 to 2011

Source: ExecuComp, Piketty and Saez (2011)

Kaplan and Rauh It’s the Market

Table 1: Average Pay of Top Hedge Fund Managers and Law Partners,Millions of 2010 $ [and Relative to Average AGI of Top 0.1%]

Source: Absolute Return, Alpha Magazine, American Lawyer, and Piketty and Saez (2010)

Kaplan and Rauh It’s the Market

Figure 3: Average Top 25 Salaries in Professional Baseball, Basketballand Football (in millions of 2010 $)

Kaplan and Rauh It’s the Market

Figure 4: Share of Income Accruing to Top 1%

Kaplan and Rauh It’s the Market

Figure 5: Generation of the Wealth-Creating Businesses in the Forbes400, Share

Kaplan and Rauh It’s the Market

Figure 6: Did the Forbes 400 Grow Up Wealthy?

Kaplan and Rauh It’s the Market

Table 2: Industries of the Wealth-Creating Businesses Behind the Forbes400

Source: our calculations from the Forbes 400

Kaplan and Rauh It’s the Market

Figure 7: Generation of the Wealth-Creating Businesses in the ForbesNon-US Billionaires, Share

Kaplan and Rauh It’s the Market

Figure 8: Did the Forbes Non-US Billionaires Grow Up Wealthy?

Kaplan and Rauh It’s the Market

Table 3: Industries of the Wealth-Creating Businesses Behind theNon-US Forbes Billionaires

Source: our calculations from the Forbes Global Billionaires

Kaplan and Rauh It’s the Market