Job Amenities & Earnings Inequality

Bell, Alex (2020): Job Amenities & Earnings Inequality.

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.

• Item Type: MPRA Paper
• Language: English
• Keywords: compensating differentials; inequality; occupational choice; gender; race
• Subjects: C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General > C18 - Methodological Issues: General; C - Mathematical and Quantitative Methods > C3 - Multiple or Simultaneous Equation Models ; Multiple Variables > C39 - Other; C - Mathematical and Quantitative Methods > C5 - Econometric Modeling > C51 - Model Construction and Estimation; J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J31 - Wage Level and Structure ; Wage Differentials

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