Inter-Industry Compensation Differentials
AbstractA vast literature has sought to assess the magnitude of inter-industry differences in pay and explain why they exist. The measurement of inter-industry pay differentials and the resulting use of this information to assess the empirical relevance of different labor market theories have been hampered, however, by the fact that measures of total compensation -- as opposed to just wages and salaries -- are not available in the datasets traditionally used. To our knowledge, we are the first to use compensation microdata in a study of inter-industry pay differentials. Because nonwage compensation can easily exceed 40 to 50 percent of wages, its inclusion has the potential to alter measured industry pay differences, either diminishing or amplifying them. We find that the inclusion of benefits increases industry dispersion, as measured by the standard deviation of inter-industry differentials, by 16 percent when no controls are included and by an even greater 30 percent when controls are included.
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Bibliographic InfoPaper provided by U.S. Bureau of Labor Statistics in its series Working Papers with number 453.
Length: 19 pages
Date of creation: Apr 2012
Date of revision:
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More information through EDIRC
inter-industry wage structure; compensation;
Find related papers by JEL classification:
- J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-05-22 (All new papers)
- NEP-LAB-2012-05-22 (Labour Economics)
- NEP-LMA-2012-05-22 (Labor Markets - Supply, Demand, & Wages)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Robert Gibbons & Lawrence F. Katz & Thomas Lemieux & Daniel Parent, 2005.
"Comparative Advantage, Learning, and Sectoral Wage Determination,"
Journal of Labor Economics,
University of Chicago Press, vol. 23(4), pages 681-724, October.
- Katz, Lawrence & Gibbons, Robert & Lemieux, Thomas & Parent, Daniel, 2005. "Comparative Advantage, Learning, and Sectoral Wage Determination," Scholarly Articles 2766651, Harvard University Department of Economics.
- Robert Gibbons & Lawrence F. Katz & Thomas Lemieux & Daniel Parent, 2002. "Comparative Advantage, Learning, and Sectoral Wage Determination," CIRANO Working Papers 2002s-35, CIRANO.
- Robert Gibbons & Lawrence F. Katz & Thomas Lemieux & Daniel Parent, 2002. "Comparative Advantage, Learning, and Sectoral Wage Determination," NBER Working Papers 8889, National Bureau of Economic Research, Inc.
- Abraham, Katharine G. (ed.), 2010. "Labor in the New Economy," National Bureau of Economic Research Books, University of Chicago Press, number 9780226001432, July.
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