This paper documents variation in working conditions among workers in the United States, presents new estimates of how workers value these conditions, and assesses their impact on estimates of the wage structure. We use evidence from a series of stated preference experiments to estimate workers’ willingness-to-pay for a broad set of job characteristics and which we validate with actual job choices. We find that working conditions vary substantially across workers, play a significant role in job choice decisions, and are central components of the compensation received by workers. Preferences vary by demographic groups and throughout the wage distribution. We find that accounting for differences in preferences for working conditions often exacerbates wage differentials and intensifies measures of wage inequality.

Joint work with Kathleen J. Mullen (RAND), David Powell (RAND), Till von Wachter (UCLA and NBER) and Jeffrey Wenger (RAND)