IDEAS home Printed from https://ideas.repec.org/a/bla/econom/v91y2024i362p497-546.html
   My bibliography  Save this article

Do wages underestimate the inequality in workers' rewards? The joint distribution of job quality and wages across occupations

Author

Listed:
  • Andrew E. Clark
  • Maria Cotofan
  • Richard Layard

Abstract

Information on both wages and job quality is needed in order to understand the occupational dispersion of wellbeing. We analyse subjective wellbeing in a large UK sample to construct a measure of ‘overall reward’, the sum of wages and the value of job quality, in 90 different occupations. If only wages are included, then labour market inequality is underestimated: the dispersion of overall rewards is one‐third larger than the dispersion of wages. Our findings are similar, and stronger, in data on US workers. We find a positive correlation between job quality and wages in all specifications, both between individuals in the cross‐section and within individuals in panel data. The gender and ethnic gaps in the labour market are larger than those in wages alone, and the overall rewards to education on the labour market are underestimated by earnings differentials alone.

Suggested Citation

  • Andrew E. Clark & Maria Cotofan & Richard Layard, 2024. "Do wages underestimate the inequality in workers' rewards? The joint distribution of job quality and wages across occupations," Economica, London School of Economics and Political Science, vol. 91(362), pages 497-546, April.
    • Handle: RePEc:bla:econom:v:91:y:2024:i:362:p:497-546
    DOI: 10.1111/ecca.12516
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/ecca.12516
    Download Restriction: no
    File URL: https://libkey.io/10.1111/ecca.12516?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Paige Ouimet & Geoffrey Tate, 2023. "Firms with Benefits? Nonwage Compensation and Implications for Firms and Labor Markets," NBER Working Papers 31463, National Bureau of Economic Research, Inc.
    2. Chen, Le-Yu & Oparina, Ekaterina & Powdthavee, Nattavudh & Srisuma, Sorawoot, 2022. "Robust Ranking of Happiness Outcomes: A Median Regression Perspective," Journal of Economic Behavior & Organization, Elsevier, vol. 200(C), pages 672-686.
    3. Elliott, Robert F. & Sandy, Robert, 1998. "Adam Smith may have been right after all: A new approach to the analysis of compensating differentials," Economics Letters, Elsevier, vol. 59(1), pages 127-131, April.
    4. Jason Sockin, 2022. "Show Me the Amenity: Are Higher-Paying Firms Better All Around?," CESifo Working Paper Series 9842, CESifo.
    5. Timothy N. Bond & Kevin Lang, 2019. "The Sad Truth about Happiness Scales," Journal of Political Economy, University of Chicago Press, vol. 127(4), pages 1629-1640.
    6. Ada Ferrer-i-Carbonell & Paul Frijters, 2004. "How Important is Methodology for the estimates of the determinants of Happiness?," Economic Journal, Royal Economic Society, vol. 114(497), pages 641-659, July.
    7. Clark, Andrew E. & Kozák, Michal, 2023. "Twenty Years of Job Quality in OECD Countries: More Good News?," IZA Discussion Papers 16597, Institute of Labor Economics (IZA).
    8. Bryson, Alex & Barth, Erling & Dale-Olsen, Harald, 2012. "Do higher wages come at a price?," Journal of Economic Psychology, Elsevier, vol. 33(1), pages 251-263.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Benjamin Schneider & Jane Whittle, 2024. "Where is the Place in the History of Work? Worksites, Workspaces, and the Home-Work Nexus," Oxford Economic and Social History Working Papers _213, University of Oxford, Department of Economics.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Stöckel, Jannis & van Exel, Job & Brouwer, Werner B.F., 2023. "Adaptation in life satisfaction and self-assessed health to disability - Evidence from the UK," Social Science & Medicine, Elsevier, vol. 328(C).
    2. O'Connor, Kelsey J., 2020. "The effect of immigration on natives’ well-being in the European Union," Journal of Economic Behavior & Organization, Elsevier, vol. 180(C), pages 257-274.
    3. Krekel, Christian & Shreedhar, Ganga & Lee, Helen & Marshall, Claire & Boler, Alison & Smith, Allison & Dolan, Paul, 2024. "Happy to help: welfare effects of a nationwide volunteering programme," LSE Research Online Documents on Economics 126209, London School of Economics and Political Science, LSE Library.
    4. Cavapozzi, Danilo & Francesconi, Marco & Nicoletti, Cheti, 2024. "Dividing Housework between Partners: Individual Preferences and Social Norms," IZA Discussion Papers 17370, Institute of Labor Economics (IZA).
    5. Ekaterina Oparina & Sorawoot Srisuma, 2022. "Analyzing Subjective Well-Being Data with Misclassification," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 40(2), pages 730-743, April.
    6. Bucciol, Alessandro & Burro, Giovanni, 2022. "Is there a happiness premium for working in the public sector? Evidence from Italy," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 97(C).
    7. Bryson, Alex & Clark, Andrew E. & Freeman, Richard B. & Green, Colin P., 2016. "Share capitalism and worker wellbeing," Labour Economics, Elsevier, vol. 42(C), pages 151-158.
    8. Chen, Le-Yu & Oparina, Ekaterina & Powdthavee, Nattavudh & Srisuma, Sorawoot, 2022. "Robust Ranking of Happiness Outcomes: A Median Regression Perspective," Journal of Economic Behavior & Organization, Elsevier, vol. 200(C), pages 672-686.
    9. Blanchflower, David G. & Bryson, Alex, 2022. "Taking the pulse of nations: A biometric measure of well-being," Economics & Human Biology, Elsevier, vol. 46(C).
    10. Amanina Abdur Rahman & Spyridon Stavropoulos & Martijn Burger & Elena Ianchovichina, 2021. "Does Institutional Quality Moderate the Relationship between Corruption and Subjective Well-Being?," Economics Bulletin, AccessEcon, vol. 41(3), pages 975-996.
    11. Clark, Andrew E. & Cotofan, Maria & Layard, Richard, 2022. "The Full Returns to the Choice of Occupation and Education," CEPREMAP Working Papers (Docweb) 2206, CEPREMAP.
    12. Ekaterina Oparina & Caspar Kaiser & Niccolo Gentile & Alexandre Tkatchenko & Andrew E. Clark & Jan-Emmanuel De Neve & Conchita D'Ambrosio, 2022. "Human wellbeing and machine learning," CEP Discussion Papers dp1863, Centre for Economic Performance, LSE.
    13. Kim, Seonghoon & Koh, Kanghyock, 2019. "The Effects of the Affordable Care Act Medicaid Expansion on Subjective Well-being," IZA Discussion Papers 12636, Institute of Labor Economics (IZA).
    14. Getinet A. Haile, 2015. "Workplace Job Satisfaction in Britain: Evidence from Linked Employer–Employee Data," LABOUR, CEIS, vol. 29(3), pages 225-242, September.
    15. Arthur Grimes, 2022. "Measuring Pandemic and Lockdown Impacts on Wellbeing," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 68(2), pages 409-427, June.
    16. O'Connor, Kelsey J., 2022. "Measuring Progress," IZA Policy Papers 194, Institute of Labor Economics (IZA).
    17. Atilano Pena-López & Paolo Rungo & Beatriz López-Bermúdez, 2021. "The "Efficiency" Effect of Conceptual Referents on the Generation of Happiness: A Cross-National Analysis," Journal of Happiness Studies, Springer, vol. 22(6), pages 2457-2483, August.
    18. Tom Günther & Jakob Conradi & Clemens Hetschko, 2024. "Socialism, Identity and the Well-Being of Unemployed Women," CESifo Working Paper Series 11154, CESifo.
    19. Kaiser, Caspar F. & Vendrik, Maarten C.M., 2020. "How Threatening Are Transformations of Happiness Scales to Subjective Wellbeing Research?," IZA Discussion Papers 13905, Institute of Labor Economics (IZA).
    20. Clark, Andrew E. & Lepinteur, Anthony, 2024. "I Can't Forget about U: Lifetime Unemployment and Retirement Well-Being," IZA Discussion Papers 17068, Institute of Labor Economics (IZA).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:econom:v:91:y:2024:i:362:p:497-546. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/lsepsuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.