Theodore Koutmeridis (University of Glasgow) 11.4.2024

ABSTRACT: We analyse the determinants of earnings for both managerial and staff employees, using a unique dataset from a large financial sector firm. The returns to college are associated with 9% higher salaries compared to workers with lower education, even after controlling for general and firm experience, hierarchical position, performance ratings, gender, ethnicity and several other factors. Returns to college are larger for inexperienced workers, while returns to experience are greater for low-educated workers. Managers have higher returns to general experience compared to staff workers and negative returns to firm tenure. When performance is good wages are almost two times higher for college graduates and for managers, whereas only low-educated workers are penalized for bad performance. A large fraction of the returns to education functions through job hierarchy, while the inclusion of performance measures does not influence the impact of schooling on earnings. Returns to experience and firm tenure are similar for high and low-educated workers in the first five years but become insignificant subsequently for highly educated workers. Asymmetric information is a key factor explaining the combination of these findings related to earnings inequality.

BIO: Theodore Koutmeridis is a Senior Lecturer in Economics at the Adam Smith Business School at the University of Glasgow, where he coordinates the Behaviour, Structure and Interventions network for interdisciplinary research. In his research he focuses on inequality, poverty and crime, for which he has been recognised with various awards, among others the British Academy Rising Star Award and the RSE Henry Duncan Medal, which according to the Royal Society of Edinburgh, he has been awarded ‘‘for his outstanding work in the field of economics where he combines a clear mastery of the microeconomic methodology, a keen instinct for its empirical applications and a deep commitment to engagement activities.’’ He has been featured in the media and various symposia, such as his “Underground Economy” TEDx talk and his “Crime and Prices” video. His work has been awarded grants for research, teaching, impact and engagement, and is currently co-funded via an ESRC-DFID grant of £700,000 for education accountability fieldwork in disadvantaged Indian schools. He is affiliated with the Institute of Labor Economics IZA and he was a Visiting Scholar at Columbia University.