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The Full Returns to the Choice of Occupation and Education

Author

Listed:
  • Clark, Andrew E.

    (Paris School of Economics)

  • Cotofan, Maria

    (King's College London)

  • Layard, Richard

    (London School of Economics)

Abstract

Information on both earnings and non-pecuniary rewards is needed to understand the occupational dispersion of wellbeing. We analyse subjective wellbeing in a large UK sample to construct a measure of "full earnings", the sum of earnings and the value of non-pecuniary rewards, in 90 different occupations. Labour-market inequality is underestimated: the dispersion of full earnings is one-third larger than the dispersion of earnings. Equally, the gender and ethnic gaps in the labour market are larger than those in earnings alone, and the full returns to education on the labour market are underestimated. These results are similar in data on US workers. In neither cross-section nor panel data do we find evidence of compensating differentials.

Suggested Citation

  • Clark, Andrew E. & Cotofan, Maria & Layard, Richard, 2022. "The Full Returns to the Choice of Occupation and Education," IZA Discussion Papers 15279, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp15279
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    References listed on IDEAS

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    More about this item

    Keywords

    occupation; wages; non-pecuniary benefits; inequality;
    All these keywords.

    JEL classification:

    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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