Preference, Comparative Advantage, and Compensating Wage Differentials for Job Routinization

Author
Keywords
Abstract

I attempt to explain why compensating differentials for job disamenities are difficult to
observe. I focus on the match between workers’ preferences for routine jobs and the
variability in tasks associated with the job. Using data from the Wisconsin Longitudinal
Study, I find that mismatched workers report lower job satisfaction and earn lower
wages. Both male and female workers in routinized jobs earn, on average, 12% less than
their counterparts in non-routinized jobs. Once preferences and mismatch are accounted
for, this difference decreases to 8% for men and 5% for women. Accounting for
mismatch is important when analyzing compensating differentials.

Year of Publication
2008
Number
525
Date Published
05/2008
Publication Language
eng
Citation Key
8391
URL
Working Papers