Past research has documented a substantial finance wage premium. We examine whether this premium reflects differences in lifetime career opportunities. Using resume data, we reconstruct career trajectories in finance and nonfinance sectors and build synthetic measures of career attractiveness that account for compensation levels, growth, and risk. We find that asset management and investment banking provide a sizable risk-adjusted career premium relative to banking, insurance, and other sectors. This premium has declined across cohorts, particularly relative to high tech. Labor-market entry patterns respond to these premia: potential entrants treat finance and high-tech careers as substitutes when choosing where to start.

We establish that the labor market helps discipline asset managers via the impact of fund liquidations on their careers. Using hand-collected data on 1,948 professionals, we find that top managers working for funds liquidated after persistently poor relative performance suffer demotion coupled with a significant loss in imputed compensation. Scarring effects are absent when liquidations are preceded by normal relative performance or involve mid-level employees. Seen through the lens of a model with moral hazard and adverse selection, these scarring effects can be ascribed to a drop in asset managers’ reputation. The findings suggest that performance-induced liquidations supplement compensation-based incentives.

We develop a novel measure of job-worker allocation quality ( JAQ ) by exploiting employer-employee data with machine learning techniques. Based on our measure, the quality of job-worker matching correlates positively with individual labor earnings and firm productivity, as well as with market competition, non-family firm status, and employees’ human capital . Management plays a key role in job-worker matching: when managerial hirings and firings persistently raise management quality , the matching of rank-and-file workers to their jobs improves. JAQ can be constructed from any employer–employee data set including workers’ occupations, and used to explore research questions in corporate finance and organization economics.