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The Value of Working Conditions in the United States and Implications for the Structure of Wages

Author

Listed:
  • Maestas, Nicole

    (Harvard Medical School)

  • Mullen, Kathleen

    (University of Oregon)

  • Powell, David

    (RAND)

  • Wachter, Till von

    (University of California, Los Angeles)

  • Wenger, Jeffrey

Abstract

This paper documents variation in working conditions among workers in the United States, presents new estimates of how workers value these conditions, and assesses the impact of working conditions on estimates of the wage structure and inequality. We use evidence from a series of stated preference experiments to estimate workers' willingness-to-pay for a broad set of job characteristics, which we validate with actual job choices. We find that working conditions vary substantially across workers, play a significant role in job choice decisions, and are central components of the compensation received by workers. Preferences vary by demographic groups and throughout the wage distribution. We find that accounting for differences in preferences for working conditions often exacerbates wage differentials by race, age, and education, and intensifies measures of wage inequality.

Suggested Citation

  • Maestas, Nicole & Mullen, Kathleen & Powell, David & Wachter, Till von & Wenger, Jeffrey, 2018. "The Value of Working Conditions in the United States and Implications for the Structure of Wages," IZA Discussion Papers 11925, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp11925
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    Keywords

    compensating differentials; wages; working conditions; stated preferences;
    All these keywords.

    JEL classification:

    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth

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