TY - JOUR
T1 - Compensating differentials, labor market segmentation, and wage inequality
AU - Daw, Jonathan
AU - Hardie, Jessica Halliday
N1 - Funding Information:
Authors are listed in alphabetical order to denote equality of contribution. This research was funded by support to the second author from the Eunice Kennedy Shriver National Institute of Child Health and Human Development to the Pennsylvania State University Population Research Institute Postdoctoral Training in Family Demography and Individual Development (5 T32 HD007514), and to the first author by NIH grants T32 HD07168, R24 HD066613, and T32 HD007289. This research uses data from the Wisconsin Longitudinal Study (WLS) of the University of Wisconsin-Madison. Since 1991, the WLS has been supported principally by the National Institute on Aging (AG-9775 and AG-21079), with additional support from the Vilas Estate Trust, the National Science Foundation, the Spencer Foundation, and the Graduate School of the University of Wisconsin-Madison. A public use file of data from the Wisconsin Longitudinal Study is available from the Wisconsin Longitudinal Study, University of Wisconsin-Madison, 1180 Observatory Drive, Madison, Wisconsin 53706 and at http://www.ssc.wisc.edu/wlsresearch/data/ . The authors wish to thank the editors and seven helpful reviewers at Social Science Research, as well as the following persons who have offered helpful comments on previous drafts of this research: Shawn Bauldry, Philip Cohen, Guang Guo, Arne Kalleberg, Ted Mouw, Heather Rackin, Charles Seguin, Brandon Wagner, John Robert Warren, and Ashton Verdery. Any errors are the authors’ alone.
PY - 2012/9
Y1 - 2012/9
N2 - Two literatures on work and the labor market draw attention to the importance of non-pecuniary job amenities. Social psychological perspectives on work suggest that workers have preferences for a range of job amenities (e.g. Halaby, 2003). The compensating differentials hypothesis predicts that workers navigate tradeoffs among different job amenities such that wage inequality overstates inequality in utility (. Smith, 1979). This paper joins these perspectives by constructing a new measure of labor market success that evaluates the degree to which workers' job amenity preferences and outcomes match. This measure of subjective success is used to predict workers' job satisfaction and to test the hypothesis that some degree of labor force inequality in wages is due to preference-based tradeoffs among all job amenities. Findings demonstrate that the new measure predicts workers' job satisfaction and provides evidence for the presence of compensating differentials in the primary and intermediate, but not secondary, labor markets.
AB - Two literatures on work and the labor market draw attention to the importance of non-pecuniary job amenities. Social psychological perspectives on work suggest that workers have preferences for a range of job amenities (e.g. Halaby, 2003). The compensating differentials hypothesis predicts that workers navigate tradeoffs among different job amenities such that wage inequality overstates inequality in utility (. Smith, 1979). This paper joins these perspectives by constructing a new measure of labor market success that evaluates the degree to which workers' job amenity preferences and outcomes match. This measure of subjective success is used to predict workers' job satisfaction and to test the hypothesis that some degree of labor force inequality in wages is due to preference-based tradeoffs among all job amenities. Findings demonstrate that the new measure predicts workers' job satisfaction and provides evidence for the presence of compensating differentials in the primary and intermediate, but not secondary, labor markets.
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U2 - 10.1016/j.ssresearch.2012.05.009
DO - 10.1016/j.ssresearch.2012.05.009
M3 - Article
C2 - 23017926
AN - SCOPUS:84863108950
SN - 0049-089X
VL - 41
SP - 1179
EP - 1197
JO - Social Science Research
JF - Social Science Research
IS - 5
ER -