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Job Complexity and Wages

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  • van Ophem, Hans
  • Hartog, Joop
  • Vijverberg, Wim P M

Abstract

The authors estimate a model inspired by J. Tinbergen's 1956 article, with utility maximizing job choice, where utility depends on job complexity and the wage rate, and where the equilibrium wage structure provides for compensation for more complex jobs. It involves maximum likelihood estimation of a two-equation model with heteroscedastic errors, in which one of the equations is an ordered probit. In the wage function, individual characteristics and job level interact (comparative advantage). Females face a steeper wage slope across job levels. Individuals' marginal rate of substitution between wage and job complexity is increasing both in job complexity and wages. Copyright 1993 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.

Suggested Citation

  • van Ophem, Hans & Hartog, Joop & Vijverberg, Wim P M, 1993. "Job Complexity and Wages," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 34(4), pages 853-872, November.
  • Handle: RePEc:ier:iecrev:v:34:y:1993:i:4:p:853-72
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    Cited by:

    1. John K. Dagsvik & Zhiyang Jia, 2014. "Labor supply as a discrete choice among latent jobs: Unobserved heterogeneity and identification," Discussion Papers 786, Statistics Norway, Research Department.
    2. Antonczyk Dirk & Leuschner Ute & Fitzenberger Bernd, 2009. "Can a Task-Based Approach Explain the Recent Changes in the German Wage Structure?," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 229(2-3), pages 214-238, April.
    3. John K. Dagsvik & Zhiyang Jia, 2016. "Labor Supply as a Choice Among Latent Jobs: Unobserved Heterogeneity and Identification," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 31(3), pages 487-506, April.
    4. Inmaculada García & José Alberto Molina, 1999. "How do workers decide their jobs? The influence of income, wage and job characteristics," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 20(4), pages 189-204.
    5. John K. Dagsvik & Zhiyang Jia & Tom Kornstad & Thor O. Thoresen, 2014. "Theoretical And Practical Arguments For Modeling Labor Supply As A Choice Among Latent Jobs," Journal of Economic Surveys, Wiley Blackwell, vol. 28(1), pages 134-151, February.
    6. Vartiainen, Juhana, 1999. "Job Assignment and the Gender Wage Differential: Theory and Evidence on Finnish Metalworkers," Working Paper Series 149, Trade Union Institute for Economic Research.
    7. Hartog, Joop, 2000. "Over-education and earnings: where are we, where should we go?," Economics of Education Review, Elsevier, vol. 19(2), pages 131-147, April.
    8. Michael Raith, 2008. "Specific knowledge and performance measurement," RAND Journal of Economics, RAND Corporation, vol. 39(4), pages 1059-1079.
    9. Jan S. Cramer, 2012. "Childhood Intelligence and Adult Mortality, and the Role of Socio-Economic Status," Tinbergen Institute Discussion Papers 12-070/4, Tinbergen Institute, revised 30 Oct 2013.
    10. Barassou Diawara & Keisuke Osumi, 2010. "Education and job complexity levels," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 57(4), pages 361-368, December.

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