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Heterogeneous Preferences, Compensating Wage Differentials, and Comparable Worth

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  • Mark R. Killingsworth

Abstract

This paper sets up a general equilibrium model of a world of heterogeneous jobs and heterogeneous tastes, and uses the model to (i) analyze the effects of employer discrimination and (ii) predict the likely consequences of requiring "equal pay for jobs of comparable worth." It shows that employment of both women and men is likely to fall as a result of comparable worth. It also shows that when individuals' tastes are heterogeneous, neither comparable worth nor the simple model of compensating differentials on which it is based provides useful insights into wage determination. In particular, when tastes are heterogeneous, there is no reason to expect equal pay for jobs of "comparable worth" even in the absence of employer discrimination.

Suggested Citation

  • Mark R. Killingsworth, 1987. "Heterogeneous Preferences, Compensating Wage Differentials, and Comparable Worth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 102(4), pages 727-742.
  • Handle: RePEc:oup:qjecon:v:102:y:1987:i:4:p:727-742.
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    File URL: http://hdl.handle.net/10.2307/1884278
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    Citations

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    Cited by:

    1. Apps, P. F. & Rees, R., 1996. "Labour supply, household production and intra-family welfare distribution," Journal of Public Economics, Elsevier, vol. 60(2), pages 199-219, May.
    2. Neumark, David & Johnson, Hans & Mejia, Marisol Cuellar, 2013. "Future skill shortages in the U.S. economy?," Economics of Education Review, Elsevier, vol. 32(C), pages 151-167.
    3. Rassou R., 1993. "Statistical measurement of gender wage differentials," ILO Working Papers 992920693402676, International Labour Organization.
    4. Elaine Sorensen, 1989. "Measuring the Pay Disparity between Typically Female Occupations and other Jobs: A Bivariate Selectivity Approach," ILR Review, Cornell University, ILR School, vol. 42(4), pages 624-639, July.
    5. Sylvie Le Minez, 2002. "Topographie des secteurs d'activité à partir des flux de mobilité intersectorielle des salariés," Économie et Statistique, Programme National Persée, vol. 354(1), pages 49-83.
    6. George E. Johnson & Gary Solon, 1984. "Pay Differences Between Women's and Men's Jobs: The Empirical Foundations of Comparable Worth Legislation," NBER Working Papers 1472, National Bureau of Economic Research, Inc.
    7. Michael Baker & Nicole M. Fortin, 2004. "Comparable worth in a decentralized labour market: the case of Ontario," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 37(4), pages 850-878, November.
    8. Riccardo Leoncini & Mariele Macaluso & Annalivia Polselli, 2023. "Gender Segregation: Analysis across Sectoral-Dominance in the UK Labour Market," Papers 2303.04539, arXiv.org, revised Dec 2023.
    9. Isabell Koske & Jean-Marc Fournier & Isabelle Wanner, 2012. "Less Income Inequality and More Growth – Are They Compatible? Part 2. The Distribution of Labour Income," OECD Economics Department Working Papers 925, OECD Publishing.
    10. Beccaría, Luis Alberto & Groisman, Fernando, 2015. "Informality and labour market segmentation: the case of Argentina," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), December.
    11. Sauermann, Henry & Roach, Michael, 2014. "Not all scientists pay to be scientists: PhDs’ preferences for publishing in industrial employment," Research Policy, Elsevier, vol. 43(1), pages 32-47.
    12. E. Jane Arnault & Louis Gordon & Douglas H. Joines & G. Michael Phillips, 2001. "An Experimental Study of Job Evaluation and Comparable Worth," ILR Review, Cornell University, ILR School, vol. 54(4), pages 806-815, July.
    13. Henry Sauermann, 2017. "Fire in the Belly? Employee Motives and Innovative Performance in Startups versus Established Firms," NBER Working Papers 23099, National Bureau of Economic Research, Inc.
    14. Michael Baker & Nicole M. Fortin, 2000. "Does Comparable Worth Work in a Decentralized Labor Market?," Working Papers baker-00-02, University of Toronto, Department of Economics.
    15. Havet, Nathalie, 2004. "Écarts salariaux et disparités professionnelles entre sexes : développements théoriques et validité empirique," L'Actualité Economique, Société Canadienne de Science Economique, vol. 80(1), pages 5-39, Mars.
    16. Carraro, Carlo & Soubeyran, Antoine, 2005. "Labour demand with heterogeneous workers: Migrations and unemployment," Research in Economics, Elsevier, vol. 59(2), pages 119-136, June.
    17. Ruzzier, Christian A. & Woo, Marcelo D., 2023. "Discrimination with inaccurate beliefs and confirmation bias," Journal of Economic Behavior & Organization, Elsevier, vol. 210(C), pages 379-390.
    18. Frédéric Palomino & Eloïc-Anil Peyrache, 2010. "Psychological Bias and Gender Wage Gap," Post-Print hal-00911836, HAL.
    19. Christiane Bode & Jasjit Singh, 2018. "Taking a hit to save the world? Employee participation in a corporate social initiative," Strategic Management Journal, Wiley Blackwell, vol. 39(4), pages 1003-1030, April.
    20. Italo Lopez Garcia, 2015. "Human Capital and Labor Informality in Chile A Life-Cycle Approach," Working Papers WR-1087, RAND Corporation.
    21. Henry Sauermann & Michael Roach, 2011. "Not All Scientists pay to be Scientists:," DRUID Working Papers 11-03, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
    22. Palomino, Frédéric & Peyrache, Eloïc-Anil, 2010. "Psychological bias and gender wage gap," Journal of Economic Behavior & Organization, Elsevier, vol. 76(3), pages 563-573, December.

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