Theory-Experimental Seminar

Alexey Gorn

Bocconi University


Seminar 3 – 14:00


This study relates the observed increase in levels and dispersion of the U.S. top wages to the increasing prominence of headhunters (professional recruiters). I illustrate the main results with a theoretical model that incorporates headhunters in the labor market framework of random search and two-sided heterogeneity. In the model, headhunters improve assortative matching between firms and their top employees via two channels: passive on-the-job search and screening of candidates. The calibrated model shows that headhunters can account for 40% of the increase in the top 1% wage share and 70% of the increase in the top 10% wage share in the U.S. from 1970 to 2010. I provide supporting empirical evidence on the importance of headhunters for the rise in top wages based on cross-country evidence on headhunter hires/fees and top income growth, as well as on micro evidence for CEO compensation in the U.S.

Download pdf
Leave Comment

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

clear formSubmit

This site uses Akismet to reduce spam. Learn how your comment data is processed.