Job Amenities & Earnings Inequality

• In Event: Beyond Wages: Job Amenities and Worker Bargaining Power

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 (including the NLSY and PSID), 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.

Author

• Alex Bell, Georgia State University
  Presenting Author