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Preferences, Comparative Advantage, and Compensating Wage Differentials for Job Routinization

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  • Climent Quintana‐Domeque

Abstract

I attempt to explain why compensating differentials for job disamenities are difficult to observe. I focus on the match between workers’ preferences for routine jobs and the variability in tasks associated with the job. Using data from the Wisconsin Longitudinal Study, I find that mismatched workers report lower job satisfaction and earn lower wages. Both male and female workers in routinized jobs earn, on average, 12% less than their counterparts in non-routinized jobs. Once preferences and mismatch are accounted for, this difference decreases to 8% for men and 5% for women. Accounting for mismatch is important when analyzing compensating differentials.

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Bibliographic Info

Article provided by Department of Economics, University of Oxford in its journal Oxford Bulletin of Economics and Statistics.

Volume (Year): 73 (2011)
Issue (Month): 2 (04)
Pages: 207-229

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Handle: RePEc:bla:obuest:v:73:y:2011:i:2:p:207-229

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  1. Daniel, Christophe & Sofer, Catherine, 1998. "Bargaining, Compensating Wage Differentials, and Dualism of the Labor Market: Theory and Evidence for France," Journal of Labor Economics, University of Chicago Press, vol. 16(3), pages 546-75, July.
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  3. Cuberes, David & Dougan, William, 2009. "How Endogenous Is Money? Evidence from a New Microeconomic Estimate," MPRA Paper 17744, University Library of Munich, Germany.
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  6. Weinberg, Bruce A. & Borghans, Lex & Weel, Bas ter, 2006. "Interpersonal Styles and Labor Market Outcomes," MERIT Working Papers 045, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  7. McNabb, Robert, 1989. "Compensating Wage Differentials: Some Evidence for Britain," Oxford Economic Papers, Oxford University Press, vol. 41(2), pages 327-38, April.
  8. José J. Sempere Monerris & Rafael Moner Colonques & Amparo Urbano Salvador, 2010. "Trade liberalization in vertically related markets," Working Papers. Serie AD 2010-09, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
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  10. Lucas, Robert E B, 1977. "Hedonic Wage Equations and Psychic Wages in the Returns to Schooling," American Economic Review, American Economic Association, vol. 67(4), pages 549-58, September.
  11. Jeffrey S. Zax & Daniel I. Rees, 2002. "IQ, Academic Performance, Environment, and Earnings," The Review of Economics and Statistics, MIT Press, vol. 84(4), pages 600-616, November.
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Cited by:
  1. Pierre-André Chiappori & Sonia Oreffice & Climent Quintana-Domeque, 2012. "Matching with a Handicap: The Case of Smoking in the Marriage Market," CHILD Working Papers Series 8, Centre for Household, Income, Labour and Demographic Economics (CHILD) - CCA.

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