Job Levels and Wages

Abstract

Job levels describe the complexity of a worker’s tasks, and her autonomy and responsibilities in their execution. Conceptually they are linked to the organization of production and can be used to extend a task-based view of wage determination. Using matched employer-employee datasets containing job-level information, we provide an empirical decomposition of life-cycle wage dynamics and demonstrate that differences in job levels account for the largest part of wage differences in the cross-section and over the life-cycle. We also show that a job-level perspective provides a fruitful interpretation of widely studied phenomena such as the gender-wage gap and returns to education and seniority.