The Value of Working Conditions in the United States and Implications for the Structure of Wages

90 Pages Posted: 19 Nov 2018

See all articles by Nicole Maestas

Nicole Maestas

Harvard Medical School - Department of Health Care Policy

Kathleen J. Mullen

RAND Corporation

David Powell

RAND Corporation

Till von Wachter

Columbia Business School - Economics Department; IZA Institute of Labor Economics

Jeffrey Wenger

RAND Corporation - RAND Europe

Multiple version iconThere are 3 versions of this paper

Abstract

This paper documents variation in working conditions among workers in the United States, presents new estimates of how workers value these conditions, and assesses the impact of working conditions on estimates of the wage structure and inequality. We use evidence from a series of stated preference experiments to estimate workers' willingness-to-pay for a broad set of job characteristics, which we validate with actual job choices. We find that working conditions vary substantially across workers, play a significant role in job choice decisions, and are central components of the compensation received by workers. Preferences vary by demographic groups and throughout the wage distribution. We find that accounting for differences in preferences for working conditions often exacerbates wage differentials by race, age, and education, and intensifies measures of wage inequality.

Keywords: working conditions, wages, compensating differentials, stated preferences

JEL Classification: J13

Suggested Citation

Maestas, Nicole and Mullen, Kathleen J. and Powell, David and von Wachter, Till and Wenger, Jeffrey, The Value of Working Conditions in the United States and Implications for the Structure of Wages. IZA Discussion Paper No. 11925. Available at SSRN: https://ssrn.com/abstract=3286185

Nicole Maestas (Contact Author)

Harvard Medical School - Department of Health Care Policy ( email )

180 Longwood Avenue
Boston, MA 02115
United States

Kathleen J. Mullen

RAND Corporation ( email )

1776 Main Street
P.O. Box 2138
Santa Monica, CA 90407-2138
United States
310-393-0411 x6265 (Phone)
310-260-8156 (Fax)

HOME PAGE: http://works.bepress.com/kathleen_mullen

David Powell

RAND Corporation ( email )

1776 Main Street
P.O. Box 2138
Santa Monica, CA 90407-2138
United States

Till Von Wachter

Columbia Business School - Economics Department ( email )

420 West 118th Street
New York, NY 10027
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Jeffrey Wenger

RAND Corporation - RAND Europe ( email )

United States

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