How Large Is the Compensating Wage Differential for R&D Workers?

Arnaud Dupuy () and Wendy Smits ()

No 4194, IZA Discussion Papers from Institute for the Study of Labor (IZA)

Abstract: The aim of this paper is to measure the extent to which lower wages in R&D functions reflect a preference effect. In contrast to the bulk of the literature on compensating wage differentials that compares wage levels of jobs with different attributes, we constructed measures of willingness to accept (WTA) and pay (WTP) for an R&D jobs using contingent valuation technique. Earnings regressions using OLS show an R&D wage penalty of about 3.5%. However, hedonic OLS regressions of WTA and WTP give significant relative preference parameters for R&D jobs that range from 0.19 to 0.22.

Keywords: R&D workers; compensating wage differentials; hedonic prices (search for similar items in EconPapers)
JEL-codes: J3 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ino, nep-ipr and nep-lab
Date: 2009-05
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Forthcoming in: Economics of Innovation and New Technology, 2010

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