Finance Jobs Are 4 Percent of the Workforce. They Took Half the Money.
SSC News Desk
A new study spanning ten countries and 30 years of payroll data shows that the finance sector — not globalization, not education, not city size — is the primary driver of widening income gaps between cities.
The finance sector employs roughly 4 percent of the workforce. It accounts for 19 percent of all top 1% earners. And in the cities where financial market jobs cluster — New York, London, Stockholm, Amsterdam, Madrid, Frankfurt — it explains between 26 and 50 percent of the entire increase in earnings concentration over the past three decades.
That is the finding of a peer-reviewed study published in Nature Cities in May 2026, drawing on administrative payroll records covering more than one billion employer-employee observations across ten countries in the global north from 1989 to 2019. The researchers compared financial cities — defined as cities hosting a national stock exchange — with comparable cities matched on population, employment, and GDP. What they found was not a story about globalization or education. It was a story about which city you live in and what industry sits at its center.
The gap is growing. In 1990, a worker in a financial city was 1.7 times more likely to be in the national top 1% of earners than a comparable worker in a matched city without a financial market presence. By 2017, that odds ratio had increased to 2.4 — an annual growth rate of 1.3 percent, compounding. Finance sector jobs within those cities drove the divergence at an even faster clip: their overrepresentation in the national top 1% grew at 2.4 percent per year.
The study covers cities that are not all financial powerhouses by global standards. Frankfurt and Toronto, Stockholm and Oslo, Amsterdam and Copenhagen all show the pattern. This is not a New York and London story. It is a story about any city where financial market jobs concentrate — and what happens to the cities that sit just outside that orbit.
The mechanism the researchers identify is rent-sharing. Financial firms distribute a portion of the outsized profits generated by financial market activity to the workers who manage those activities. Those workers are geographically fixed to the cities where the exchanges and clearing operations sit. When financial market profits surged in the 1990s and 2000s, the workers who shared in them became top earners — and they were concentrated in a small number of cities. Their counterparts in equally sized cities without financial markets did not experience the same earnings growth, regardless of their education levels or industry mix.
The implications extend beyond the top 1%. In Amsterdam, financial sector jobs accounted for 78 percent of the increase in local top 5% earnings shares. In Madrid, 47 percent. Even in cities where the finance sector’s contribution to national earnings concentration was modest — Tokyo at 4 percent, Frankfurt at 2 percent — the local earnings concentration effect was substantially larger. Finance pulls up the top of the local earnings distribution, widening the gap between the highest-paid and everyone else within the same city.
This matters in the context of the July 2026 jobs report. Financial activities shed 121,000 jobs since their peak in May 2025 — the second-largest sector contraction in the current cycle after local government education. The workers losing those positions are concentrated in cities that built their economic identity around financial employment. When financial sector payrolls contract, the rent-sharing that drove top earnings growth in those cities goes with it. The cities that hosted the gains now absorb the losses. The workers in matched cities — the ones who never received the earnings premium — do not experience the same volatility, because they never received the gains.
Three decades of payroll data from ten countries arrive at the same place: the finance sector is a machine for concentrating earnings in the places where it operates. When it expands, it pulls up a narrow slice of the workforce in a narrow set of cities. When it contracts, those workers and those cities feel it first. The cities that did not host financial markets never got the premium. They also will not absorb the correction. That asymmetry is not an accident of geography. It is the design of a labor market organized around financial rent.
