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Job Levels and Wages

SOEPpapers 1190, 79 S.

Christian Bayer, Moritz Kuhn


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Job levels summarize the complexity, autonomy, and responsibility of task execution. Conceptually, job levels are related to the organization of production, are distinct from occupations, and can be constructed from data on task execution. We highlight their empirical role in matched employer-employee data for life-cycle wage dynamics, refine a task-based view of wage determination, and demonstrate that differences in job levels account for most of the observed wage differences. We also show, within a structural framework, that a job-level perspective provides a novel and fruitful interpretation of widely studied phenomena such as the gender wage gap and the returns to education and seniority.

JEL-Classification: D33;E24;J31
Keywords: Job levels, wage structure, career ladder