Preferences, Comparative Advantage, and Compensating Wage Differentials for Job Routinization

I attempt to explain why compensating differentials for job disamenities are difficult to observe. I focus on the match between workers’ preferences for routine jobs and the variability in tasks associated with the job. Using data from the Wisconsin Longitudinal Study, I find that mismatched workers report lower job satisfaction and earn lower wages. Both male and female workers in routinized jobs earn, on average, 12% less than their counterparts in non-routinized jobs. Once preferences and mismatch are accounted for, this difference decreases to 8% for men and 5% for women. Accounting for mismatch is important when analyzing compensating differentials.wage differentials, preferences, job attributes, routine tasks, mismatch

Obesity, Wages and Employment in Europe

This paper examines the associations between obesity, employment status and wages for several European countries. Our results provide weak evidence that obese workers are more likely to be unemployed or tend to be more segregated in self-employment jobs than their non-obese counterparts. We also find difficult to detect statistically significant relationships between obesity and wages. As previously reported in the literature, the association between obesity, unemployment and wages seems to be different for men and women. Moreover, heterogeneity is also found across countries. Such heterogeneity can be somewhat explained by some labor market institutions, such as the collective bargaining coverage and the employer-provided health insurance.obesity, labor market, heterogeneity, institutions.

Fatter Attraction: Marital Status and the Relationship between BMI and Labor Supply

We empirically analyze the labor supply choices of married men and women according to their body size (BMI), using data from the Panel Study of Income Dynamics on anthropometric characteristics of both spouses, and unmarried men and women as comparison group. Heavier husbands are found to work significantly more hours and earn more labor income, controlling for both spouses’ demographic and socioeconomic characteristics. Conversely, no such effect is found for either unmarried individuals or for married women. We suggest a marriage market mechanism through which male BMI and earnings are positively related. Heavier married men compensate for their negative physical trait by providing their wives with more disposable income, working more hours and earning more. Heavier women may not able to compensate their spouse through labor supply, as female physical traits are more relevant in the marriage market than the corresponding male traits.Body Size, Labor Supply, Earnings, Marriage

Preferences, comparative advantage, and compensating wage differentials for job routinization

In this paper I attempt to explain why labor economists typically have not been able to find much evidence on compensating wage differentials for job disamenities, except for risk of death. The key insight here is that, although workers need to be compensated when their preferences do not match the requirements for performing a job task, the occurrence of mismatch also decreases productivity, reducing the surplus to be divided between workers and firms, and decreasing wages. I focus on the match between workers¿ preferences for routine jobs and the variability in tasks associated with the job. Using data from the Wisconsin Longitudinal Study, I find that mismatched workers earn lower wages and that both male and female workers in routinized jobs earn, on average, 5.5% and 7% less than their counterparts in non-routinized jobs. However, once preferences and mismatch are accounted for, this difference decreases to 2% for men and 4% for women. These findings suggest that accounting for mismatch is important when analyzing compensating wage differentials.Compensating wage differentials, preferences, comparative advantage, mismatch, routine

The evolution of adult height in Europe: A brief note

This paper presents new evidence on the evolution of adult height in 10 European countries for cohorts born between 1950 and 1980 using the European Community Household Panel (ECHP), which collects height data from Austria, Belgium, Denmark, Finland, Greece, Ireland, Italy, Portugal, Spain and Sweden. Our findings show a gradual increase in adult height across all countries. However, countries from Southern Europe (Greece, Italy, Portugal, Spain) experienced higher gains in stature than those located in Northern Europe (Austria, Belgium, Denmark, Finland, Ireland and Sweden).Europe, height, ECHP

Income and body mass index in Europe

The problem of obesity is alarming public health authorities around the world. Therefore, it is important to study its determinants. In this paper we explore the empirical relationship between household income and body mass index (BMI) in nine European Union countries. Our findings suggest that the association is negative for women, but we find no statistically significant relationship for men. However, we show that the different relationship for men and women appears to be driven by the negative relationship for women between BMI and individual income from work. We tentatively conclude that the negative relationship between household income and BMI for women may simply be capturing the wage penalty that obese women suffer in the labor market.Europe, obesity, income

Relative Concerns on Visible Consumption: A Source of Economic Distortions

Do relative concerns on visible consumption give rise to economic distortions? We re-examine the question posited by Arrow and Dasgupta (2009) building upon their general framework but recognizing that relative concerns can only apply to visible goods (e.g., cars, clothing, jewelry) and that households consume both visible and non-visible goods. Contrary to Arrow and Dasgupta (2009), the answer to this question turns to be always affirmative: the competitive equilibrium will always be different than the socially optimal one, since individuals do not take into account the negative externality they exert on others through the consumption of the visible good, while the social planner does. If one invokes separability assumptions, then the steady state competitive equilibrium consumption of non-visible goods will be strictly lower than the socially optimal one.Financial support from the Spanish Ministry of Science and Innovation (ECO2011-29751 and ECO2012-36719) is gratefully acknowledged

Fatter attraction: anthropometric and socieconomic matching on the marriage market

We construct a matching model on the marriage market along more than one characteristic, where individuals have preferences over physical attractiveness (proxied by anthropometric characteristics) and market and household productivity of potential mates (proxied by socioeconomic characteristics), with a certain degree of substitutability between them. Men and women assess each other through an index combining these various attributes, so the matching is one-dimensional. We estimate the sorting and trade-offs among these characteristics using data from the PSID, finding evidence of compensation between anthropometric and socioeconomic characteristics for both genders, and of equality of these marginal rates of substitution across traits. Among men, a 10% increase in BMI can be compensated by a higher wage, the supplement being estimated to be around 3%. Similarly, for women, an additional year of education may compensate up to three BMI units.BMI, marriage market, wages, education

Matching with a Handicap: The Case of Smoking in the Marriage Market

We develop a matching model on the marriage market, where individuals have preferences over the smoking status of potential mates, and over their socioeconomic quality. Spousal smoking is bad for non-smokers, but it is neutral for smokers, while individuals always prefer high socioeconomic quality. Furthermore, there is a gender difference in smoking prevalence, there being more smoking men than smoking women for all education levels, so that smoking women and non-smoking men are in short supply. The model generates clear cut conditions regarding matching patterns. Using CPS data and its Tobacco Use Supplements for the years 1996 to 2007, and proxying socioeconomic status by educational attainment, we find that these conditions are satisfied. There are fewer "mixed" couples where the wife smokes than vice-versa, and matching is assortative on education within smoking types of couples. Among non-smoking wives those with smoking husbands have on average 0.14 fewer years of completed education than those with non-smoking husbands. Finally, and somewhat counterintuitively, we find that, as theory predicts, among smoking husbands, those who marry smoking wives have on average 0.16 more years of completed education than those with non-smoking wives.Smoking, education, matching, marriage market

Fatter Attraction: Anthropometric and Socioeconomic Characteristics in the Marriage Market

We construct a matching model on the marriage market along more than one characteristic, where individuals have preferences over physical attractiveness (proxied by anthropometric characteristics) and market and household productivity of potential mates (proxied by socioeconomic characteristics), with a certain degree of substitutability between them. Men and women assess each other through an index combining these various attributes, so the matching is one-dimensional. We estimate the trade-offs among these characteristics using data from the PSID and the ECHP, finding evidence of compensation between anthropometric and socioeconomic characteristics. An additional unit of husband's (wife's) BMI can be compensated by a 0.3%-increase (0.15%-increase) in husband's (wife's) average (predicted) wage. Interestingly, these findings suggest that female physical attractiveness plays a larger role in men's assessment of a woman than male physical attractiveness does for women.BMI, height, wages, earnings, marriage market