The Full Returns to the Choice of Occupation and Education

Andrew Clark, Maria Cotofan () and Richard Layard ()
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Maria Cotofan: King's College London
Richard Layard: London School of Economics

No 15279, IZA Discussion Papers from Institute of Labor Economics (IZA)

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.

Keywords: occupation; wages; non-pecuniary benefits; inequality (search for similar items in EconPapers)
JEL-codes: I31 J31 (search for similar items in EconPapers)
Pages: 59 pages
Date: 2022-05
New Economics Papers: this item is included in nep-eur, nep-hap, nep-lma and nep-ltv
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Published - published as 'Do wages underestimate the inequality in workers’ rewards? The joint distribution of job quality and wages across occupations' in: Economica, 2024, 91 (362), 497-546

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Working Paper: The Full Returns to the Choice of Occupation and Education (2022)
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