Classic economic theory suggests people earn wages according to their productivity. Over time CEO's, directors, managers and the like seem to earn more relative to the 'normal worker'. Lets call this the managerial class and the working class. Now is it the case that the managerial class has grown so much more productive than the working class over time? How do we measure their performance? I would like to read up on the current consensus in the literature about whether the managerial class gets compensated according to their productivity.

I am sketching a rough picture with no references, no definitions, not distinguishing between sectors, etc, I hope you still more or less understand the topic I would like investigate. I have searched google.scholar using a combination of terms like manager, productivity, wages, effect on, etc but with little success.

Does anyone know a good literature review reference on the topic? Ideally an article of the form like you find in the journal of economic perspectives. But also any reference of a empirical/quantitative study from a high quality journal is much welcomed.

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    $\begingroup$ How do you know there is a "current consensus in the literature?" $\endgroup$ Commented Jun 20, 2021 at 13:11
  • $\begingroup$ I do not. Perhaps a better phrase would be "current state of the literature". Any pointers in the right direction is welcome, the right search terms would help. $\endgroup$ Commented Jun 20, 2021 at 19:09

1 Answer 1


Gabaix & Landier, 2008 ("Why has CEO pay increased so much?".QJE) is a canonical paper in the literature on CEO pay. In their introduction, the authors also review other theories on this issue.

  • $\begingroup$ thank you sir, this will help me on my way :) $\endgroup$ Commented Jun 21, 2021 at 19:55

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