Valuing business impacts in the areas of wage inequality and employee well-being

Fabrice Murtin and Vincent Siegerink

No 15, OECD Papers on Well-being and Inequalities from OECD Publishing

Abstract: This working paper proposes a methodology to monetise five aspects of employee well-being (wage inequality, being employed, excess working hours, relationships with management and job security) using theoretical and empirical frameworks drawn from welfare economics. Preliminary results highlight a large loss of welfare arising from within-firm wage inequality as well as a strong impact of working conditions on workers’ well-being. On the aggregate, suppressing the negative externalities of the firm linked to excess working hours, tensions with management and job insecurity would yield an increase in social welfare equivalent to a 25% increase in household income, representing many years of economic growth. Greater transparency on company wage distributions and working conditions is necessary to apply these methodologies to real firms.

Keywords: employee well-being; monetary valuation; Wage inequality; working conditions (search for similar items in EconPapers)
JEL-codes: I31 J31 J81 M52 (search for similar items in EconPapers)
Date: 2023-06-08
New Economics Papers: this item is included in nep-lma
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Persistent link: https://EconPapers.repec.org/RePEc:oec:wiseaa:15-en

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