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Job Amenities & Earnings Inequality

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  • Bell, Alex

Abstract

Previous research on prices of job amenities has suffered from simultaneity bias due to workers’ unobserved offer sets, resulting in “wrong-signed” compensating wage differentials. I propose a simple amenity pricing framework that uses an imprecise proxy for workers’ offer sets to identify amenity prices holding offer sets fixed. Using price estimates for a set of observed job characteristics across various public survey datasets, I find a large role for costly amenity substitution in explaining the gender pay gap (on the order of two-thirds) and little role for amenities to explain inequalities by race or by parent background.

Suggested Citation

  • Bell, Alex, 2020. "Job Amenities & Earnings Inequality," MPRA Paper 118516, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:118516
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    References listed on IDEAS

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    More about this item

    Keywords

    compensating differentials; inequality; occupational choice; gender; race;
    All these keywords.

    JEL classification:

    • C18 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Methodolical Issues: General
    • C39 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Other
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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