Wages or Fringes? Some Evidence on Trade-Offs and Sorting

Tor Eriksson and Nicolai Kristensen

Journal of Labor Economics, 2014, vol. 32, issue 4, 899 - 928

Abstract: The two key predictions of hedonic wage theory are that there is a trade-off between wages and nonmonetary rewards and that the latter can be used as a sorting device by firms to attract and retain the kind of employees they desire. We use the vignettes method to estimate individuals' willingness-to-pay for fringe benefits and job amenities. We find negative wage-fringe trade-offs, considerable heterogeneity in willingness-to-pay for fringe benefits, and signs of sorting.

Date: 2014
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Related works:
Working Paper: Wages or Fringes? Some Evidence on Trade-offs and Sorting (2010)
Working Paper: Wages or Fringes? Some Evidence on Trade-offs and Sorting (2010)
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