Other reasons for the U.S. salaries not mentioned yet:
0) Banning of non-competes in Silicon Valley (!!) and ease of incorporation / listing on markets back in the 90's and before
1) Foreign investment in the U.S. (Saudi, Chinese, Russian money due to favorable treatment, anonymity (!)) and presence of U.S. dollar worldwide as a reserve currency - lots of that money ended up in Silicon Valley (Softbank etc). This especially matters since a lot of the compensation is in RSUs and the U.S. stocks have benefitted from above.
2) DotCom bubble because of (1) inflated salary expectations; U.S. had a head start over other countries also because of the DotCom bubble.
3) Personal bankruptcy laws are more lax than Europe I believe (although I'm not positive), since you can discharge all personal debt in a bankruptcy, cost of risk is lower (leads to more risk taking).
4) Gap between EU/US salaries has varied depending on exchange rate. Generally the way the world economy is set up tends to strengthen the dollar (everyone needs them to transact oil and pay foreign obligations after 1971/1974). That might be changing though; with a weaker dollar salary gap will naturally shrink.
5) As people mentioned before: vacation, school, healthcare cost differentials (though my hunch is that this is a small effect if any)
6) U.S. is a unified market of ~300 million people, most speaking English. EU is many smaller distinct markets because of language & cultural reasons (more-so than U.S. states), so more effort required for growth.
Probably some other reasons that slipped my mind at the moment.
3) Is largely not true, the EU is largely heterogeneous when it comes to personal bankruptcy laws. The fact that unsecured consumer loans are as cheap as secured consumer loans (e.g. car loans), in many EU countries, shows that it is very to get rid of debt permanently. In the country I know best a personal bankruptcy means that you have to keep paying your debts for a period of 5 years before they are forgiven. During this time you must live on $500 per month (excl. rent) the rest goes to the creditors.
I think we're in agreement then that the U.S. is more lenient with its bankruptcy laws than Europe (on the whole, although as you pointed out it varies by country)
0) Banning of non-competes in Silicon Valley (!!) and ease of incorporation / listing on markets back in the 90's and before
1) Foreign investment in the U.S. (Saudi, Chinese, Russian money due to favorable treatment, anonymity (!)) and presence of U.S. dollar worldwide as a reserve currency - lots of that money ended up in Silicon Valley (Softbank etc). This especially matters since a lot of the compensation is in RSUs and the U.S. stocks have benefitted from above.
2) DotCom bubble because of (1) inflated salary expectations; U.S. had a head start over other countries also because of the DotCom bubble.
3) Personal bankruptcy laws are more lax than Europe I believe (although I'm not positive), since you can discharge all personal debt in a bankruptcy, cost of risk is lower (leads to more risk taking).
4) Gap between EU/US salaries has varied depending on exchange rate. Generally the way the world economy is set up tends to strengthen the dollar (everyone needs them to transact oil and pay foreign obligations after 1971/1974). That might be changing though; with a weaker dollar salary gap will naturally shrink.
5) As people mentioned before: vacation, school, healthcare cost differentials (though my hunch is that this is a small effect if any)
6) U.S. is a unified market of ~300 million people, most speaking English. EU is many smaller distinct markets because of language & cultural reasons (more-so than U.S. states), so more effort required for growth.
Probably some other reasons that slipped my mind at the moment.