Job Upgrading and Earnings Growth for Non-college Workers

• In Event: 2308 - Inequality and Job Quality

Abstract

Workers without a college degree have faced slow wage growth for nearly four decades. Some employers organize work in ways associated with higher pay for these workers, by implementing job enrichment, high-performance work systems, or structured management practices. However, these job upgrading strategies can be biased toward higher-skill workers and in some cases actually reduce employment opportunities for workers without a college degree. We clarify this trade-off by specifying several pathways through which job upgrading can affect pay, some of which are more or less skill-biased. We then test these ideas by matching restricted-use linked employer-employee data to the near-universe of online job postings. This allows us to assess shifting worker selection and to compare among different types of job upgrading. We show that jobs listing more valuable tasks pay more, but that around half of this premium is due to more positive worker selection. We then show that jobs that specifically involve higher discretion and more tasks involving on-the-job learning have higher starting pay.

Authors

• Dylan Nelson, MIT

• Nathan Wilmers, Massachusetts Institute of Technology

• Letian Zhang, Harvard University