Aubrey Wang – Firm Level Determinants of Wages: Evidence From New Data

I applied for a grant from Newcomb-Tulane College to obtain funding so that I could do my senior thesis. I had discovered unused data, so I was excited to be the first one to analyze it. Due to reforms passed in Congress a few years ago, public companies are required to post the pay of their median employee in their annual proxy statements, which are uploaded onto the SEC’s website. However, this data is not structured, and so (it) required a human to go to the correct part of the document and collect it. I estimated that I would need to collect data from over 3000 companies, which I obviously could not do by myself. This is where the funding came in, and I was able to crowdsource the data collection on Amazon. If I recall correctly, workers were paid about $.07 per data point. Each data point was collected twice for accuracy. In the end, median pay data was obtained for over 1,400 companies, as some companies fell under an exemption for publishing their median worker pay. The result of my analysis showed that a one standard deviation increase in a company’s debt ratio (the ratio of total debt to its market cap) would decrease the pay of the median worker by 10%. This is quite a large effect, and this contradicts some findings in the financial economics literature, which used poorer quality data. This was quite a finding, and my professors agreed. Because of my thesis, I was awarded the Senior Honors Award in my department, given to the best student based on research and coursework. My GPA was not close to the students who won the GPA award, so it is really the quality of the thesis that resulted in the award. My advisors said that I had raised the bar for future students, so I think it was pretty good. I could not have done this without funding, as a main strength of my paper is the data that I used. I learned a lot about the field of corporate finance while writing this, as I have had no previous exposure to it. I also learned a lot about myself and my strength in research, and about what I wanted to do in the future. I think this project is the crowning glory of my time at Tulane, and it would not have been nearly as good if I didn’t have the resources that were available.

Written by Aubrey Wang, Dean’s Grant recipient, 2018-2019