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

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. Empirical analysis of these topics are scarce as they require detailed data on all monetary as well as nonmonetary rewards, not only for the job chosen but also for alternative offers. In this paper this data predicament is solved by the use of the vignettes method to estimate individuals\u27 willingness to pay for fringe benefits and job amenities. We find clear negative wage-fringe trade-offs, considerable heterogeneity in willingness to pay for fringe benefits, and signs of sorting. The findings imply that personnel economics models can be applied also to the analysis of nonmonetary rewards

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

The two key predictions of hedonic wage theory are that there is a trade-o¤ between wages and nonmonetary rewards and that the latter can be used as a sorting device by …rms to attract and retain the kind of employees they desire. Empirical analysis of these topics are scarce as they require detailed data on all monetary as well as nonmonetary rewards, not only for the job chosen but also for alternative o¤ers. In this paper this data predicament is solved by the use of the vignettes method to estimate individuals’ willingness to pay for fringe bene…ts and job amenities. We …nd clear negative wage-fringe trade-o¤s, con- siderable heterogeneity in willingness to pay for fringe bene…ts, and signs of sorting. The …ndings imply that personnel economics models can be applied also to the analysis of nonmonetary rewards.Fringe benefits; Nonmonetary rewards; Trade-off; Sorting; Heterogeneity

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

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. Empirical analysis of these topics are scarce as they require detailed data on all monetary as well as nonmonetary rewards, not only for the job chosen but also for alternative offers. In this paper this data predicament is solved by the use of the vignettes method to estimate individuals' willingness to pay for fringe benefits and job amenities. We find clear negative wage-fringe trade-offs, considerable heterogeneity in willingness to pay for fringe benefits, and signs of sorting. The findings imply that personnel economics models can be applied also to the analysis of nonmonetary rewards.fringe benefits, nonmonetary rewards, trade-off, sorting, heterogeneity

Estimating complementarity between education and training

In this paper, we formulate and estimate a structural model of post-schooling training that explicitly allows for possible complementarity between initial schooling levels and returns to training. Precisely, the wage outcome equation depends on accumulated schooling and on the incidence of training. The effect of training on wage growth depends on individual permanent endowments as well as on education. We find evidence of statistically significant complementarity, i.e. the higher educated receive the highest return to the MBA-type training considered here.Skill Complementarity ; Dynamic Treatment Effects ; Dynamic Programming ; Random Coefficients

Estimating Complementarity between Education and Training

In this paper, we formulate and estimate a structural model of post-schooling training that explicitly allows for possible complementarity between initial schooling levels and returns to training. Precisely, the wage outcome equation depends on accumulated schooling and on the incidence of training. The effect of training on wage growth depends on individual permanent endowments as well as on education. We find evidence of statistically significant complementarity, i.e. the higher educated receive the highest return to the MBA-type training considered here.dynamic programming, dynamic treatment effects, skill complementarity, random coefficients

External Validation of the Use of Vignettes in Cross-Country Health Studies

Cross-country comparisons of subjective assessments are rendered difficult if not impossible because of sub-population specific response style. To correct for this, the use of vignettes has become increasingly popular, notably within cross-country health studies. However, the validity of vignettes as a means to re-scale across sample populations critically rests on the assumption of "response consistency" (RC): that vignettes and self-assessments are evaluated on the same scale. In this paper, we seek to test this assumption by applying objective measures of health along with subjective measures and vignettes. Our results indicate that the assumption of RC is not innocuous and that our extended model relaxing this assumption improves the fit and significantly changes the cross-country rankings of health vis-à-vis the standard Chopit model.cross-country health comparison, vignettes, subjective and objective measures

Economic Satisfaction and Income Rank in Small Neighbourhoods

We contribute to the literature on well-being and comparisons by appealing to new Danish data dividing the country up into around 9,000 small neighbourhoods. Administrative data provides us with the income of every person in each of these neighbourhoods. This income information is matched to demographic and economic satisfaction variables from eight years of Danish ECHP data. Panel regression analysis shows that, conditional on own household income, respondents report higher satisfaction levels when their neighbours are richer. However, individuals are rank-sensitive: conditional on own income and neighbourhood median income, respondents are more satisfied as their percentile neighbourhood ranking improves. A ten percentage point rise in rank (i.e. from 40th to 20th position in a 200-household cell) is worth 0.11 on a one to six scale, which is a large marginal effect in satisfaction terms.income comparisons, neighbours, satisfaction, geo-coded data

Job satisfaction and co-worker wages: Status or signal?

This paper uses matched employer-employee panel data to show that individual job satisfaction is higher when other workers in the same establishment are better-paid. This runs contrary to a large literature which has found evidence of income comparisons in subjective well-being. We argue that the difference hinges on the nature of the reference group. We here use co-workers. Their wages not only induce jealousy, but also provide a signal about the worker's own future earnings. Our positive estimated coefficient on others' wages shows that this positive future earnings signal outweighs any negative status effect. This phenomenon is stronger for men, and in the private sector.Ce papier utilise des données appariées entre salariés et entreprises afin de montrer que les individus font état de niveaux de satisfaction au travail plus élevés quand les autres salariés de la même entreprise sont mieux payés. Ce résultat va à l'encontre d'une littérature importante sur le bien-être individuel qui a plutôt mis en exergue des comparaisons de revenu. Nous suggérons que la différence entre ces résultats provient de la nature du groupe de référence. Ici nous considérons des collègues au travail, dont le salaire peut induire un sentiment de jalousie, mais également informer l'individu sur son salaire futur potentiel. Le fait que le coefficient estimé sur le salaire des collègues soit positif montre que l'effet positif du signal l'emporte sur l'effet négatif du statut. Ce phénomène se trouve surtout pour les hommes et dans le secteur privé

Uobserverede karakteristikas effekt på priselasticiteten - en reestimation af bilvalgsmodellen for Danmark

Bilvalgsmodellen bygger i sin tidligere form alene på data for ét års bilsalg (1997), idet sådanne data var nye på daværende tidspunkt. Imidlertid foreligger der nu data for flere års bilsalg. En reestimation af modellen på flere års data har forbedret modellen væsentligt. I dette projekt er bilvalgsmodellen blevet reestimeret og opdateret med de nye data. Modellen vil herefter blive integreret i en samlet model for afgifternes effekt på de samlede CO2 emissioner fra hele bilparken