Search results

This article tests whether workers are indifferent between risky and safe jobs provided that, in labor market equilibrium, wages should serve as a utility equalizing device. Workers’ preferences are elicited through a partial measure of overall job satisfaction: satisfaction with job-related risk. Given that selectivity turns out to be important, we use selectivity corrected models. Results show that wage differentials do not exclusively compensate workers for being in dangerous jobs. However, as job characteristics are substitutable in workers’ utility, they could feel satisfied, even if they were not fully compensated financially for working in dangerous jobs.

The institution of tenure has elicited debate and controversy since its introduction in higher education. Proponents argue the need for tenure based on academic freedom and efficient university governance. Critics argue that it represents inefficiency in the higher education labor market and protects less productive faculty members. The use of tenure in academic libraries has been no less controversial, with only 40−60% of academic libraries supporting tenure track positions for academic librarians. This dichotomy in the labor market for academic librarians represents a natural experiment and allows for the testing of the presence of a compensating wage differential for tenure.

This study examines 10 years’ worth of cross-sectional data drawn from member libraries of the Association of Research Libraries (ARL). Models examine both the institutional characteristics of tenure-granting ARL academic libraries and the impact of tenure on starting salaries. Issues related to both a union wage premium and a compensating wage differential due to tenure are explored. The results of this research suggest that tenure, while serving other functions within an academic library setting, does not have the predicted impact on starting salaries.

The objective of this paper is to analyse the role of adverse working conditions in the determination of individual wages and job satisfaction in the Finnish labour market.

The paper uses estimation of econometric models for wages and job satisfaction scores by using the Quality of Work Life Survey of Statistics Finland.

The paper finds that adverse working conditions have a very minor role in the determination of individual wages. In contrast, adverse working conditions substantially decrease the level of job satisfaction and the perception of fairness of pay at the workplace. This evidence speaks against the existence of compensating wage differentials, but is consistent with the view that the Finnish labour market functions in a non‐competitive fashion.

Provides useful information for improvement of working conditions.

Very few papers have analysed the data sets that include, besides wages and job satisfaction scores, detailed information on several different aspects of self‐reported working conditions at the workplace, not just conditions typical of some occupations or industries.

Using the Canadian Census of 2016, the present study examines the Black and White gap in compensating differentials for their commute to work.

The data are from the Canadian Census of 2016. The standard Mincerian wage regression, augmented by commute-related variables and their confounders, is estimated by OLS. The estimations use sample weights and heteroscedasticity robust standard errors.

In the standard Mincerian wage regressions, Black men are found to earn non-negligibly less than White men. No such gap is found among women. When the Mincerian wage equation is augmented by commute duration and its confounders, commute duration is revealed to positively predict wages of White men and negatively associate with wages of Black men. At the same time, in the specifications including commute duration and its confounders, the coefficient for the dummy variable identifying Black men is positive with a non-negligible size. The latter pattern indicates wage discrepancies among Black men by their commute duration. Again, no difference is found between Black and White women in these estimations.

The main caveat is that due to data limitations, causal estimates could not be produced.

For the Canadian working men, the uncovered patterns indicate both between and within race gaps in the impact of commuting on wages. Particularly, Black men seem to commute longer towards relatively lower paying jobs, while the opposite holds for their White counterparts. However, Black men who reside close to their work earn substantially more than both otherwise identical White men and Black men who live far away from their jobs. The implications for research and policy are discussed.

This is the first paper focused on commute compensating differentials by race using Canadian data.

In this chapter, we investigate two-way causality between health and the hourly wage. We employ insights from the human capital and compensating wage differential models, a panel formed from the National Longitudinal Survey of Youth 1997, and dynamic panel estimation methods in this investigation. We adopt plausible specifications in which a change in health induces a change in the wage with a lag and a change in the wage induces a change in health, also with a lag. We uncover a causal relationship between two of the five measures of health and the wage in which a reduction in health leads to an increase in the wage rate in a panel of US young adults who had completed their formal schooling by 2006 and were continuously employed from that year through 2011. There is no evidence of a causal relationship running from the wage rate to health in this panel. The former result highlights the multidimensional nature of health. It is consistent with an extension of the compensating wage differential model in which a large amount of effort in one period is required to obtain promotions and the wage increases that accompany them in subsequent periods. That effort may cause reductions in health and to a negative effect of health in the previous period on the current period wage. In this framework, employees have imperfect information about the effort requirements of a particular job when they are hired, and employers have imperfect information about the amount of effort new hirers are willing to exert. The result is also consistent with a model in which investments in career advancement compete with investments in health for time – the ultimate scarce resource. The lack of a causal effect of the wage on health may suggest that forces that go in opposite directions in the human capital and compensating wage differential models offset each other.

To analyse two important effects of the level of social concern in the firm. First, the effect on the labour force composition, i.e. do particular types of concerns attract certain kinds of employees? Second, the effect on the wage level within the firm, i.e. do firm‐provided social concerns substitute for money wages, or are they provided as an additional compensation?

Empirical analysis using a survey on more than 2,000 firms, linked to administrative data for each employee in the firms. Estimates wage equations using the IV approach to deal with endogeneity of the level of social concerns. Two competing theories aiming to explain the use of social concerns toward employees, the compensating wage differential theory and corporate social responsibility, are compared.

Finds indications in favour of the compensating wage differential theory when looking at wage effects at the firm level, whereas looking at the target group level finds that white‐collar workers might experience higher levels of social concerns without having lower wages, which contrast the theory of compensating wage differentials.

The paper compare two well‐established theories within two different disciplines – the compensating wage differential theory from economics, and CSR from management. This is done using solid empirical analysis.

The most enduring measure of how individuals make personal decisions affecting their health and safety is the compensating wage differential for job safety risk revealed in the labor market via hedonic equilibrium outcomes. The decisions in turn reveal the value of a statistical life (VSL), the value of a statistical injury (VSI), and the value of a statistical life year (VSLY), which have both mortality and morbidity aspects that we describe and apply here. All such tradeoff rates play important roles in policy decisions concerning improving individual welfare. Specifically, we explicate the recent empirical research on VSL and its related concepts and link the empirical results to the ongoing examinations of many government policies intended to improve individuals' health and longevity. We pay special attention to recent issues such as the COVID pandemic and newly emerging foci on distributional consequences concerning which demographic groups may benefit most from certain regulations.

Both labour groups and the national press frequently justify demands for protection against industrial adjustment on the grounds that it leads to the destruction of communities and traditional ways of life, with a devastating effect on welfare. To justify this claim in the context of a Ricardian open‐economy model requires quite strong restrictions on worker preferences, but a plausible case can be made. Presents a model based on the attachment of workers to their socio‐cultural environment, and suggests some policy options for redressing trade‐induced inequities.

This paper uses data from the Cedefop European Skills and Jobs survey (ESJS) (Cedefop, 2014, ESJS microdata are Cedefop copyright and are reproduced with the permission of Cedefop. Further information is available at Cedefop, 2015), a new international dataset on skill mismatch of adult workers in 28 EU countries, to decompose the wage penalty of overeducated workers. The ESJ survey allows for integration of a rich set of variables in the estimation of the effect of overeducation on earnings, such as individuals’ job search motives and the skill needs of their jobs. Oaxaca decomposition techniques are employed to uncover the extent to which the earnings penalties of overeducated workers can be attributed to either (i) individual human capital attributes, (ii) job characteristics, (iii) information asymmetries, (iv) compensating job attributes, or (iv) assignment to jobs with different skill needs. Differences in human capital and job-skill requirements are important factors in explaining the wage premium. It is found that asymmetry of information accounts for a significant part of the overeducation wage penalty of tertiary education graduates, whereas job characteristics and the low skill content of their jobs can explain most of the wage gap for medium-qualified employees. Little evidence is found in favor of equilibrium theories of compensating wage differentials and career mobility. Accepting that much remains to be learned with regards to the drivers of overeducation, this paper provides evidence in support of the need for customized policy responses to tackle overeducation.

Uses longitudinal data from the NLSY79 to examine the effect of a broad variety of performance‐based pay schemes and fringe benefits on male and female wages between 1988 and 1998. Specifically, analyzes whether the offer of various performance‐based pay schemes and fringe benefits functions as an alternative work incentive, eliciting greater effort and raising wages or, instead, it is accompanied by lower wages, as predicted by compensating wage theory. The results indicate that, while most performance‐based pay schemes are associated with higher wages to differing extents across gender, tips are commonly accompanied by lower wages among men. Similarly, while the offer of a retirement plan appears to as a work incentive raising male and female wages, workers are willing to trade wages for jobs offering life and medical insurance.