Autonomy and wage divergence: evidence from European survey data

This paper contributes to the understanding of wage inequality in Western Europe. We assess the relationship between worker autonomy, defined as the degree of control workers have over their work process, and job wage growth in Western Europe from 2003 to 2018. We present econometric analyses using high-quality microdata from the EU Survey of Income and Living Conditions. Our key finding is that wages in high-autonomy jobs have grown significantly faster than in low-autonomy jobs. In other words, the autonomy premium has increased. Because workers in high-autonomy jobs are at the top of the wage distribution, this trend contributes to wage inequality. In addition, we assess the role of technological change, institutions, and demographics for the autonomy premium using additional worker survey data. Our analysis reveals that (i) the autonomy premium increases faster in industries and countries with faster technological change; (ii) strong collective bargaining institutions reduce the autonomy premium but could not halt increases in wage inequality in recent years; (iii) the autonomy premium rises for men and women similarly. However, the increase in the autonomy premium intensifies gender inequality because women are more likely to work in low-autonomy jobs.