Another study that has looked at th

Another study that has looked at the long-run development of wages in a field with features that havebeensuggestedtomagnify small differencesinability,namely thefinancial sector, is Phillippon and Reshef (2012). They found that deregulation of financial markets is closely tied to compensation levels, as well as education levels and innovation, but also that the sector in the 1930s and since the 1990s seems to pay wages that aresubstantially higher than what can be accounted for by observable factors (such as increased complexity of tasks and education levels). Interestingly, when comparing the relative pay in the financial sector with the top percentile income share in the entire United States, as is done in Figure 7.25, the resemblance is striking. The post-Depression drop in the 1930s is close to contemporaneous, and this is also true for the strong increase beginning in the late 1970s.