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How large is the compensating wage differential for R&D workers?

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  • Arnaud Dupuy
  • Wendy Smits

Abstract

The aim of this paper is to measure the extent to which lower wages in R&D functions reflect a preference effect. In contrast to the bulk of the literature on compensating wage differentials that compares wage levels of jobs with different attributes, we constructed measures of willingness to accept (WTA) and pay (WTP) for R&D jobs using the Contingent Valuation technique. Earnings regressions using OLS show an R&D wage penalty of about 3.5%. However, hedonic OLS regressions of WTA and WTP give significant relative preference parameters for R&D jobs that range from 0.19 to 0.22.

Suggested Citation

  • Arnaud Dupuy & Wendy Smits, 2010. "How large is the compensating wage differential for R&D workers?," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 19(5), pages 423-436.
    • Handle: RePEc:taf:ecinnt:v:19:y:2010:i:5:p:423-436
    DOI: 10.1080/10438590903434836
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    Cited by:

    1. Claire Bonnard, 2012. "The Access of the Young Graduates in Sciences into R&D Profession: A Switching Model Treatment for the French Case," LABOUR, CEIS, vol. 26(1), pages 46-65, March.
    2. Claire Bonnard, 2011. "Les incitations à l'innovation dans le secteur privé," Post-Print halshs-00599700, HAL.
    3. Claire Bonnard, 2012. "The Access of the Young Graduates in Sciences into RD Profession: A Switching Model Treatment for the French Case," Post-Print halshs-00671315, HAL.
    4. Dorner, Matthias & Fryges, Helmut & Schopen, Kathrin, 2017. "Wages in high-tech start-ups – Do academic spin-offs pay a wage premium?," Research Policy, Elsevier, vol. 46(1), pages 1-18.
    5. Mazumder, Debojyoti, 2017. "Technological Progress and Optimum Labor Market Friction," MPRA Paper 92699, University Library of Munich, Germany.

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    More about this item

    Keywords

    R&D workers; compensating wage differentials; hedonic prices;
    All these keywords.

    JEL classification:

    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs

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