Job Complexity and Wages

Hans van Ophem, Joop Hartog and Wim Vijverberg

International Economic Review, 1993, vol. 34, issue 4, 853-72

Abstract: The authors estimate a model inspired by J. Tinbergen's 1956 article, with utility maximizing job choice, where utility depends on job complexity and the wage rate, and where the equilibrium wage structure provides for compensation for more complex jobs. It involves maximum likelihood estimation of a two-equation model with heteroscedastic errors, in which one of the equations is an ordered probit. In the wage function, individual characteristics and job level interact (comparative advantage). Females face a steeper wage slope across job levels. Individuals' marginal rate of substitution between wage and job complexity is increasing both in job complexity and wages. Copyright 1993 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.

Date: 1993
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