Job Dispersion and Compensating Wage Differentials. Working Paper 469.

摘要

Empirical literature on compensating wage differentials has a mixed history. While there have been some successes, much of this litersture finds weak support for the theory of equalizing differences. We agruge that it is dispersion in total job values or 'job dispersion' that leads to biased compensating wage differential estimates. We begin by demonstrating how job dispersion can lead to biased hedonic estimates. Then we take a partial equilibrium on-the-job search model with utility from non-wage job characteristics, structurally estimate it and then simulate a dataset. Using our simulated dataset, we conduct a detailes analysis of the sources of bias in hedonic wage estimates. While worker heterogeneity and job dynamics are important sources on job dispersion, a significant proportion of the variation in jobs can only be explaines by the inherent randomness of job offers..