The Impact of Regulation on CEO Labor Markets

I examine empirically whether the executive labor market helps to slot managers with higher education quality into jobs where they can obtain greater returns from their human capital skills. Comparing a sample of regulated gas and electric firms with manufacturing firms, I find that utilities attract CEOs with a lower-quality education than do unregulated firms. Comparing a sample of airline firms pre- and postderegulation, airlines have CEOs with a higher-quality education postderegulation. These results suggest that the labor market slots CEOs with a lower quality of education into regulated business environments.