Estimating Wage-Fringe Trade-Offs: Some Data Problems

Robert S. Smith and Ronald Ehrenberg

No 827, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Our paper attempts to identify the types of data nee3ed to estimate tradeoffs between wages and fringe benefits (such as pensions); it also explores the usefulness for this estimation of one particular employer- based data set collected by gay Associates. We stress three things: first, that employer-based data sets are required. Second, because pensions and many other fringe benefits are actuarial functions of wages or salaries, these technical relationships must be accounted for in estimation. Third, to take account of unobservable heterogeneity of employees across employers, one must use econometric methods that control for these unobservable variables. The paper concludes with a discussion of our attempts to estimate the tradeoff between wages and fringe benefits using a unique database for 200 establishments that contains information on wages and actuarial valuations of employer costs of fringe benefits at three different job levels.

Date: 1981-12
Note: LS
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Published as Smith, Robert S. and Ronald Ehrenberg. "Estimating Wage-Fringe Trade-Offs: Some Data Problems." The Measurement of Labor Cost, edited by Jack E. Triplett. Chicago: University of Chicago Press, (1983).
Published as Estimating Wage-Fringe Trade-Offs: Some Data Problems , Robert S. Smith, Ronald G. Ehrenberg. in The Measurement of Labor Cost , Triplett. 1983

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