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Compensating wage differentials and voluntary job changes: Evidence from West Germany

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  • Ernesto Villanueva

Abstract

Does the labor market place wage premia on jobs that involve physical strain, job, insecurity or bad regulation of hours? This paper derives bounds on the monetary returns to these job disamenities in the West German labor market. We show that in a market with dispersion in both job characteristics and wages, the average wage change of workers who switch jobs voluntarily and opt for consuming more (less) disamenities,provides an upper (lower) bound on the market return to the disamenity. Using longitudinal information from workers in the German Socio Economic Panel, we estimate an upper bound of 5% and a lower bound of 3.5% for the market return to work strain in a job.

Suggested Citation

  • Ernesto Villanueva, 2004. "Compensating wage differentials and voluntary job changes: Evidence from West Germany," Economics Working Papers 738, Department of Economics and Business, Universitat Pompeu Fabra.
    • Handle: RePEc:upf:upfgen:738
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    Cited by:

    1. Sandra Schaffner & Hannes Spengler, 2005. "Der Einfluss unbeobachteter Heterogenität auf kompensatorische Lohndifferentiale und den Wert eines statistischen Lebens: eine mikroökonometrische Parallelanalyse mit IABS und SOEP," Discussion Papers of DIW Berlin 539, DIW Berlin, German Institute for Economic Research.
    2. Josse Delfgaauw, 2005. "Where to go? Workers' Reasons to quit and Intra- versus Interindustry Job Mobility," Tinbergen Institute Discussion Papers 05-027/1, Tinbergen Institute, revised 08 Aug 2005.
    3. Hübler, Dominik & Hübler, Olaf, 2006. "Is There a Trade-off Between Job Security and Wages in Germany and the UK?," IZA Discussion Papers 2241, Institute of Labor Economics (IZA).
    4. John Helliwell & Haifang Huang, 2011. "Well-Being and Trust in the Workplace," Journal of Happiness Studies, Springer, vol. 12(5), pages 747-767, October.
    5. Josse Delfgaauw, 2007. "Where to go? Workers' reasons to quit and intra- vs. interindustry job mobility," Applied Economics, Taylor & Francis Journals, vol. 39(16), pages 2057-2067.
    6. Cornelissen, Thomas & Hübler, Olaf, 2007. "Unobserved Individual and Firm Heterogeneity in Wage and Tenure Functions: Evidence from German Linked Employer-Employee Data," IZA Discussion Papers 2741, Institute of Labor Economics (IZA).
    7. John F. Helliwell & Haifang Huang, 2010. "How's the Job? Well-Being and Social Capital in the Workplace," ILR Review, Cornell University, ILR School, vol. 63(2), pages 205-227, January.
    8. MORIKAWA Masayuki, 2010. "Insecurity of Employment and Work-Life Balance: From the viewpoint of compensating wage differentials," Discussion papers 10052, Research Institute of Economy, Trade and Industry (RIETI).

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    More about this item

    Keywords

    Wage level and structure; job satisfaction; compensation packages;
    All these keywords.

    JEL classification:

    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods

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