Measuring Job Risks When Hedonic Wage Models Do Not Do the Job

Susana Ferreira, Sara Martinez-de-Morentin and Amaya Erro-Garcés
Additional contact information
Amaya Erro-Garcés: Universidad Pública de Navarra

No 16716, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Hedonic wage regressions show little evidence that European workers facing larger job risks and other workplace disamenities receive higher wages. On the other hand, workers in more risky or unpleasant jobs are less satisfied with their jobs, ceteris paribus. If labor markets were perfectly competitive and workers fully informed of their working conditions ex ante, according to the theory of compensating differentials, there should be no relationship between on-the-job risk and job satisfaction because wages would fully adjust to compensate for differences in job characteristics. We show that when wages do not fully compensate for on-the-job risks, the willingness to pay to reduce mortality risks estimated from hedonic regressions needs to be complemented with a residual effect of job risks on utility which is not capitalized on wages. We explore the potential of job satisfaction regressions as an additional valuation approach to estimate the tradeoffs between wages and risks that keep job satisfaction constant.

Keywords: stated preference; hedonic wages; job satisfaction; experienced preference; on-the-job risk; value of a statistical life (search for similar items in EconPapers)
JEL-codes: I12 I18 J17 J31 K32 Q51 (search for similar items in EconPapers)
Pages: 48 pages
Date: 2024-01
New Economics Papers: this item is included in nep-eur, nep-hea, nep-hrm, nep-lma, nep-mac and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations:

Published - published in: Journal of Environmental Economics and Management, 2025, 130, 103120

Downloads: (external link)
https://docs.iza.org/dp16716.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp16716

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().