Show Me the Amenity: Are Higher-Paying Firms Better All Around?

85 Pages Posted: 20 Jul 2022

See all articles by Jason Sockin

Jason Sockin

IZA Institute of Labor Economics

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Date Written: 2022

Abstract

Do firms that pay more offer better amenities, or does the greater pay compensate for worse amenities? Using matched U.S. employee-employer data, this paper estimates the joint distribution of wages, amenities, and job satisfaction across firms. Fifty amenities are captured applying topic modeling to workers’ free-response descriptions of their jobs. Three main findings emerge. First, higher-paying firms offer better amenities. Second, employees value amenities: one-third have a more pronounced effect on satisfaction than pay. Third, since workers are willing to pay for satisfaction and because the covariance between amenities and wages is sufficiently high, amenities widen compensation dispersion across firms.

Keywords: job amenities, job satisfaction, inequality

JEL Classification: J010, J320, M500

Suggested Citation

Sockin, Jason, Show Me the Amenity: Are Higher-Paying Firms Better All Around? (2022). CESifo Working Paper No. 9842, Available at SSRN: https://ssrn.com/abstract=4167445 or http://dx.doi.org/10.2139/ssrn.4167445

Jason Sockin (Contact Author)

IZA Institute of Labor Economics ( email )

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

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