The Value of Working Conditions in the United States and Implications for the Structure of Wages

Abstract

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Teacher Preferences, Working Conditions, and Compensation Structure

“…The design started in marketing and is valued because these experiments predict real-world purchasing behavior as well as broader market shares (Beggs, Cardell, and Hausman 1981;Green and Srinivasan 1990;Hainmueller, Hopkins, and Yamamoto 2013). In recent years, economists have used the method to study the career preferences of college students (Wiswall and Zafar 2017) and worker preferences for flexibility and other labor conditions (Mas and Pallais 2017;Maestas et al 2018). These authors find that preferences elicited in hypothetical experiments closely correspond with real-world choices.…”

“…18 Moreover, formally incentive-compatible designs do not significantly alter the predictive validity of experiments (Holt and Laury 2002;Ding 2007;Wlomert and Eggers 2016). Incentive compatibility seems to matter only if discovering one's preferences requires significant effort, or if subjects have a distinct reason to dissemble; 19 estimates from hypothetical choices align with those from incentivized elicitations in settings where respondents already know their preferences (Camerer and Hogarth 1999;Mas and Pallais 2017;Maestas et al 2018). Because compensation and working conditions affect a teacher's daily life, they have likely considered their preferences, suggesting the need for new effort to discover their preferences is minimal.…”

“…And, interestingly, the cost of commuting we discover matches a developed urban literature estimating the cost of travel time. More broadly, a range of evidence suggests the method's robustness and realism (Camerer and Hogarth 1999;Mas and Pallais 2017;Wiswall and Zafar 2018;Maestas et al 2018).…”

Toward a Framework for Time Use, Welfare, and Household-Centric Economic Measurement

“…This would be analogous to the use of hedonic wage regressions in order to isolate the marginal benefit or disbenefit of certain job characteristics, as compared with average wages, in the conventional approach. Maestas et al (2018) ask workers about their preferences for working conditions, such as flexibility in hours, vacation time, and meaningfulness of the work, and how much they would be willing to accept in pay reductions to change them. This enables them to discuss the extent to which working conditions exacerbate wage inequality.…”

Reservation Wages and Workers’ Valuation of Job Flexibility: Evidence from a Natural Field Experiment

“…Another literature to which we relate is the research on how individuals value workplace amenities such as job flexibility. Survey evidence shows that workers state that they are willing to take lower pay for more flexible jobs (e.g., Hamermesh (1999); Pierce (2001); Eriksson and Kristensen (2014); Maestas et al (2018)). However, recovering the workers' actual valuation of job flexibility from naturally occurring data has proven difficult for several reasons.…”