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Estimating Compensating Wage Differentials Using Voluntary Job Changes

Evidence from Germany

Bibliographic Data

ID4573513
AuthorsErnesto Villanueva (0000-0002-2330-5566, corresponding author)
Year2007
Volume60
Issue4
Pages544-561
Publication date2007-07-01
Open AccessYes
TypeARTICLE
VenueIndustrial and Labor Relations Review (JOURNAL)
Journal identifiersISSN: 0019-7939 • E-ISSN: 2162-271X
PublisherSAGE Publications Inc (PUBLISHER)
DOI10.1177/001979390706000405
OpenAlexW1581114950
LanguageEN
Citations received8
References cited25

The author develops a model predicting that in a labor market that attaches a wage premium to jobs with a disamenity (a compensating wage differential), the premium's upper bound will be defined by the average wage change of voluntary job movers whose consumption of the disamenity rises as a result of their move; its lower bound, by the wage change of those whose consumption of the disamenity falls. These predictions will not hold if, as predicted by a "segmented" labor market model, the labor market attaches a wage penalty to workplace disamenities. Using longitudinal data on job characteristics and wages in Germany in 1984-2001, the author estimates the market returns to four workplace disamenities: heavy workload, job insecurity, poor hours regulation, and a mismatch between skills possessed and skills required. The results broadly support the existence of compensating differentials in the German labor market

Compensating differential · Consumption (sociology) · Differential (mechanical device) · Economics · Efficiency wage · Labour economics · Monopsony · Turnover · Wage · Wage share · Employment and Welfare Studies · Labor market dynamics and wage inequality · Retirement, Disability, and Employment

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    Lawrence F Katz, Richard B Freeman•Differences and changes in wage…•1995

  • Chapter 12 The theory of equalizing differences

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Citations per year0.47
Citation span2009 - 2025 (17)
Highly citedNo

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