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Job levels and Wages

Author

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  • Christian Bayer
  • Moritz Kuhn

Abstract

Job levels summarize the complexity, autonomy, and responsibility involved in executing tasks. They are conceptually distinct from occupations and education. Our finding that job levels can be constructed from task execution data demonstrates their economic content. We present a novel theory of employer job design in which jobs with different levels emerge endogenously. Using matched employer-employee data, we demonstrate the theory-consistent mediating role of job levels in life-cycle wage growth, gender wage gaps, and returns to education and seniority. Our theory interprets some wage differences as arising from differences in human capital utilization and offers a new perspective on observed wage differences.

Suggested Citation

  • Christian Bayer & Moritz Kuhn, 2025. "Job levels and Wages," RFBerlin Discussion Paper Series 2587, ROCKWOOL Foundation Berlin (RFBerlin).
    • Handle: RePEc:crm:wpaper:2587
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    Keywords

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    JEL classification:

    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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