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Within Occupation Wage Dispersion and the Task Content of Jobs

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  • Lucas van der Velde

Abstract

Most analyses linking task content of jobs to income inequality focus on the effects between occupations, e.g. the growing dispersion between lousy and lovely jobs. The theory, meanwhile, provides insights on links between task content of jobs and inequality also within occupations: models predict compression of wages in more routine jobs, that is those where capital is a direct substitute for labour, and an increase in dispersion in jobs where capital and labour are complements. I document that within occupations dispersion of wages is empirically relevant, as it represents around half of total wage inequality across Europe. I then link wage inequality to the task content of jobs. Using matched employee–employer data from Europe for the period 2002–14, I show that occupations where tasks complement newer technologies exhibit higher wage dispersion. This relationship is robust to adjusting for a variety of confounding and mitigating channels.

Suggested Citation

  • Lucas van der Velde, 2020. "Within Occupation Wage Dispersion and the Task Content of Jobs," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 82(5), pages 1161-1197, October.
    • Handle: RePEc:bla:obuest:v:82:y:2020:i:5:p:1161-1197
    DOI: 10.1111/obes.12368
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    Cited by:

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    2. Koster, Hans R.A. & Ozgen, Ceren, 2021. "Cities and tasks," Journal of Urban Economics, Elsevier, vol. 126(C).
    3. Christenko, Aleksandr, 2022. "Automation and occupational mobility: A task and knowledge-based approach," Technology in Society, Elsevier, vol. 70(C).
    4. Fana Marta & Giangregorio Luca, 2021. "Routine-biased technical change can fail: Evidence from France," JRC Working Papers on Labour, Education and Technology 2021-14, Joint Research Centre.

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    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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