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Title: Show Me the Amenity: Are Higher-Paying Firms Better All Around? Show Me the Amenity: Are Higher-Paying Firms Better All Around?
Citation Type: Miscellaneous
Publication Year: 2021
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Abstract: Do higher-paying firms offer more favorable work, or compensate for less favorable work? Using matched employee-employer data for the United States, this paper estimates the joint distribution of wages, amenities, and job satisfaction across firms. Forty-eight amenities are captured by applying topic modeling to workers' free-response descriptions of their jobs. There are three main findings. First, high-paying firms are high-satisfaction firms because they offer better amenities: 81-92 percent of the rise in job satisfaction from moving to a higher-paying firm reflects improved non-wage aspects. Second, workers, especially high-earners, are willing to pay for job satisfaction, gaining in amenity value at least 54-101 percent of the average wage when moving from the worst-to the best-amenity firms. Third, since the elasticity of amenity value to wages across firms is positive (1.0-1.8), incorporating non-wage amenities nearly doubles the variance in total compensation across firms. Wages therefore understate firm-level inequality.
Url: https://www.researchgate.net/publication/355926545
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Authors: Sockin, Jason
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Data Collections: IPUMS CPS
Topics: Labor Force and Occupational Structure
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