Executive Pay and Inequality

To what extent do rising incomes at the top of the distribution represent rising returns to skill and, as a result, pay for performance (which arguably provides more opportunity for mobility via the general performance of the economy) as opposed to rent capture?

Tom DiPrete, Giddings Professor of Sociology; co-director of the Institute for Social and Economic Research and Policy (ISERP); and co-director of the Center for the Study of Wealth and Inequality at Columbia University, discussed new evidence on the extent to which the process of paying executives incorporates biases that raise executive compensation above what is justified on the basis of performance.