Publication in the Review of Economic Studies
Companies share rising profits with their employees, which has led to above-average wage increases in the financial sector in recent years. This was revealed by a team led by Prof. Michael Böhm, Professor at the TU University Dortmund.
The researchers investigated why wages in the financial sector have been rising sharply since the 1980s. Data from the U.S. and Sweden show that employees of financial companies earn 70 percent more than the national economy average. In the mid-1980s, the figure was only ten percent. The reason for this drastic increase is the ever-increasing profits of the financial sector, analyzed the team of Prof. Michael Böhm, Professor at the TU University Dortmund.
The researchers initially followed the assumption that higher wages could be due to increased skills. They examined data on the cognitive and emotional performance of workers from Sweden and their wages within and outside the financial sector. The researchers used data from the U.S. as a comparison, due to its leadership role in the financial industry. A comparison of skills data with wage trends in the financial industry from 1990 to 2017 showed: Increased wages were not demonstrably related to employee talent.
Companies pass on profits
The scientists then compared the wages of employees with the accounting performance of the respective companies. They were able to show that companies in the financial sector generally shared about ten percent of their profits with their employees (“rent sharing”) during the period under consideration. Employees at all levels benefit – from the head of department to the assistant and the cleaning staff.
At least half of the increased wages in the financial industry can be statistically explained by rent sharing. Lack of competition, heavy regulation and lack of transparency in the industry could be reasons for rent sharing, according to the researchers. “Our study shows that some industries pay higher wages regardless of employee performance,” says author Michael Böhm.
Böhm, Metzger und Strömberg (2022, The Review of Economic Studies, Since You’re So Rich, You Must Be Really Smart”: Talent, Rent Sharing, and the Finance Wage Premium)
Entry into financial sector dependent on contacts and life planning
The researchers also explored the question of why there are not more young people entering the financial sector to take advantage of high wages. They noted: Whether someone enters the industry depends in part on whether their parents or other social contacts work in finance, and whether that leads to employment. Moreover, workers’ resumes show that they only become high earners after about ten years in the financial industry. So whether young people look for a job in the financial sector also depends on their interests and whether they make short- or long-term decisions.
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Location & approach
The campus of TU Dortmund University is located close to interstate junction Dortmund West, where the Sauerlandlinie A 45 (Frankfurt-Dortmund) crosses the Ruhrschnellweg B 1 / A 40. The best interstate exit to take from A 45 is "Dortmund-Eichlinghofen" (closer to Campus Süd), and from B 1 / A 40 "Dortmund-Dorstfeld" (closer to Campus Nord). Signs for the university are located at both exits. Also, there is a new exit before you pass over the B 1-bridge leading into Dortmund.
To get from Campus North to Campus South by car, there is the connection via Vogelpothsweg/Baroper Straße. We recommend you leave your car on one of the parking lots at Campus North and use the H-Bahn (suspended monorail system), which conveniently connects the two campuses.
TU Dortmund University has its own train station ("Dortmund Universität"). From there, suburban trains (S-Bahn) leave for Dortmund main station ("Dortmund Hauptbahnhof") and Düsseldorf main station via the "Düsseldorf Airport Train Station" (take S-Bahn number 1, which leaves every 20 or 30 minutes). The university is easily reached from Bochum, Essen, Mülheim an der Ruhr and Duisburg.
You can also take the bus or subway train from Dortmund city to the university: From Dortmund main station, you can take any train bound for the Station "Stadtgarten", usually lines U41, U45, U 47 and U49. At "Stadtgarten" you switch trains and get on line U42 towards "Hombruch". Look out for the Station "An der Palmweide". From the bus stop just across the road, busses bound for TU Dortmund University leave every ten minutes (445, 447 and 462). Another option is to take the subway routes U41, U45, U47 and U49 from Dortmund main station to the stop "Dortmund Kampstraße". From there, take U43 or U44 to the stop "Dortmund Wittener Straße". Switch to bus line 447 and get off at "Dortmund Universität S".
The H-Bahn is one of the hallmarks of TU Dortmund University. There are two stations on Campus Nord. One ("Dortmund Universität S") is directly located at the suburban train stop, which connects the university directly with the city of Dortmund and the rest of the Ruhr Area. Also from this station, there are connections to the "Technologiepark" and (via Campus Süd) Eichlinghofen. The other station is located at the dining hall at Campus Nord and offers a direct connection to Campus Süd every five minutes.
The AirportExpress is a fast and convenient means of transport from Dortmund Airport (DTM) to Dortmund Central Station, taking you there in little more than 20 minutes. From Dortmund Central Station, you can continue to the university campus by interurban railway (S-Bahn). A larger range of international flight connections is offered at Düsseldorf Airport (DUS), which is about 60 kilometres away and can be directly reached by S-Bahn from the university station.
The facilities of TU Dortmund University are spread over two campuses, the larger Campus North and the smaller Campus South. Additionally, some areas of the university are located in the adjacent "Technologiepark".
Street navigation from and to the TU Dortmund University:
The document and the graphic represent the motorways and federal highways around the TU Dortmund University in a very simplified way:
This interactive map helps you find and navigate between facilities and buildings on campus:
This document contains a simple campus map in German and English: