Job levels and Wages

Christian Bayer and Moritz Kuhn

No 2587, RFBerlin Discussion Paper Series from ROCKWOOL Foundation Berlin (RFBerlin)

Abstract: Job levels summarize the complexity, autonomy, and responsibility involved in executing tasks. They are conceptually distinct from occupations and education. Our finding that job levels can be constructed from task execution data demonstrates their economic content. We present a novel theory of employer job design in which jobs with different levels emerge endogenously. Using matched employer-employee data, we demonstrate the theory-consistent mediating role of job levels in life-cycle wage growth, gender wage gaps, and returns to education and seniority. Our theory interprets some wage differences as arising from differences in human capital utilization and offers a new perspective on observed wage differences.

Keywords: job levels; wage structure; career ladder (search for similar items in EconPapers)
JEL-codes: D33 E24 J31 (search for similar items in EconPapers)
Date: 2025-10
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Persistent link: https://EconPapers.repec.org/RePEc:crm:wpaper:2587

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